Bloomberg News

Hungary Economic Confidence Drops to Two-Year Low in January

January 24, 2012

Jan. 23 (Bloomberg) -- Hungary’s economic sentiment index dropped to a two-year low in January as the outlook for businesses and consumers deteriorated.

The index fell to minus 26.8, the lowest level since November 2009, from minus 24.6 the previous month, the Budapest- based GKI research institute said today in an e-mailed statement. The business confidence index dropped to minus 16.3 from minus 14.5 in December, while the consumer confidence fell to minus 56.6 from minus 53.3.

Hungary is trying to revive bailout talks with the European Union and the International Monetary Fund that broke down last month over a Hungarian law that they deem to be a threat to central bank independence. Hungary is willing to change the rule to quell concern, Premier Viktor Orban said Jan. 20.

The forint has rallied 6.3 percent since touching a record low of 324.24 per euro on Jan. 5. Hungary’s euro-denominated bonds due July 2014 advanced for a fourth day on Jan. 20, cutting the yield 51 basis points to 9.741 percent, compared with 10.987 percent a week ago and 13.034 percent on Jan. 9, the all-time high for that security.

OTP Bank Nyrt., Hungary’s largest lender, has risen 21 percent to 3,816 forint during the past seven trading sessions, its longest winning streak since the seven days ended April 11, 2011.

--Editors: Andrew Langley, Balazs Penz

To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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