Hungary’s unemployment rate rose sharply to 9.7% in the Q1, data showed on Tuesday, and analysts said it could peak higher than previously believed as recession bites deep.
The three-month rolling jobless rate jumped from 9.1% in December-February, and was also well above the 8.0% figure recorded in the same period a year earlier, the Central Statistics Office (KSH) said. The rise was steeper than expected by most analysts, to near the 10% figure they said would come by the end of the first half.
Hungary, which staved off financial collapse by way of a $25.1 billion International Monetary Fund-led rescue loan in October, faces its worst downturn in almost two decades. The government expects the economy to contract by 6% in 2009.
The forint was unfazed, trading at 295.56 against the euro at 0734 GMT, a shade stronger than the opening level.
Hungary’s unemployment rate will continue to rise throughout this year, peaking at around 13% in the Q4 and staying at that level for a longer period as the country’s recession takes its toll on firms, one analyst said.
“It will not decrease very quickly,” said Zoltán Török, an analyst at Raiffeisen Bank. “We will not have positive economic growth for some time to come.” Török said the unemployment rate could still be 11% at the end of 2010. He expects the economy to shrink by 1 to 2% next year.
“Without growth, nobody will hire,” Török said.
Gábor Ambrus, an analyst at 4CAST, said the increase was very steep.
“It is only a matter of time before unemployment will be back in the double digit territory, last seen in the 90s,” Ambrus wrote in a note.
The number of unemployed rose to 402,800 in January-March from 377,700 in December-February and was also higher than 332,600 a year earlier.
The number of people at work totaled 3.764 million, down from 3.844 million a year earlier. (Reuters)