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GKI confidence index declines in March in first fall since September

Economic think-tank GKI's combined monthly gauge of business and consumer confidence prepared jointly with Erste Bank fell to -10.7 in March, declining for the first time in a half year, GKI reported on Wednesday.

Business expectations deteriorated only slightly but consumer confidence dropped sharply, pushing the overall seasonally adjusted index down to its last summer level.

The combined GKI index rose to -5.1 in February. The March decline followed steady improvements since September 2010.

The business confidence component of the combined index also declined for the first time in six months, dropping to -1.9 in March from 2.9 in February.

The consumer-confidence component of the combined index dropped for the fifth consecutive month in March, falling to -37.3 this month from -27.7 in February. The March index value was similar to that of April 2010.

The index components, which GKI prepares with the support of the European Union, showed that the outlook with regard to Hungary's economy deteriorated significantly this month in all business sectors as well among households.

Among companies in all sectors of the economy, the intention to raise prices declined only among industrial companies in March. A bigger part of trade companies planned to raise prices than before, and the average size of the planned increase was also bigger.

The prospect of making new hires rose slightly among industrial companies but declined slightly among trade and service companies and declined significantly among construction companies in March.

The unemployment worries of households rose significantly in March.