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Hungarian economic sentiment fell on lower business confidence

Hungarian businesses grew more pessimistic in February, market research company GKI said.

The overall economic sentiment index fell to minus 18.2 in February from a revised minus 17.3 the previous month, the lowest level since August. The business confidence index fell to minus 5.8 from minus 9.7, GKI said in an e-mailed statement. Hungarian economic sentiment has been near record lows since June, when Prime Minister Ferenc Gyurcsány’s government announced measures to curb the budget deficit.

Higher taxes, more expensive medicine and lower subsidies mean less disposable income, sapping corporate revenue. „Retailers and especially service companies became more pessimistic than in January,” GKI said. „The assessment of Hungary's economic outlook didn't change substantially, pessimists continue to be the vast majority.”

Magyar Telekom Nyrt, Hungary's former phone monopoly that is now controlled by Deutsche Telekom AG, on March 12 said the government measures will cut revenue by several billion forint because its customers are cutting back spending. Ft 1 billion is €4 million ($5.4 million). Consumer confidence was little changed, with the index for individuals rising to minus 53.7 from minus 53.8, which was the lowest since its inception in 1996, GKI said. (Bloomberg)