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Hungarian Consumer Confidence Posts Biggest Monthly Fall In Nearly 30 Years: GKI

Hungarian think tank GKI's consumer confidence indicator posted its biggest monthly fall in nearly three decades in April amid the coronavirus pandemic, GKI has said in a statement.

The forint plumbed record lows near 370 versus the euro earlier this month, prompting factory shutdowns and raising the spectre of mass unemployment after years of strong economic expansion.

The crisis has presented Prime Minister Viktor Orban with the toughest challenge to his decade-long rule. His response to rule by decree indefinitely has drawn criticism from the European Union.

Stimulus Package

Orban's government has unveiled a stimulus package worth up to 18%-20% of gross domestic product, including central bank programmes.

However, some analysts have said the government may have taken too long in responding to the crisis given the rapid pace of collapse in economic activity.

The GKI survey said the indicator was still above its historic lows, but Hungarians turned drastically more pessimistic about their employment prospects as well as the outlook for the broader economy.

"This is clearly the result of the coronavirus," said Gabor Karsai an economist at GKI.

"The dramatic increase in worries over unemployment is no surprise in itself," Karsai said. "However, it still conveys a message to the government that more attention should be devoted to this matter."

Outlook

The GKI survey said consumer expectations about the outlook for the Hungarian economy were near all-time lows hit in April 2009 in the midst of the global financial crisis.

Inflation expectations also deteriorated, GKI said. Hungarian headline inflation came in at an annual 3.9% in March, above market forecasts, while core inflation scaled levels not seen since the end of 2012, data showed.

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