Dropping consumer confidence and willingness to purchase

According to a recent survey conducted by GfK Hungária and Corvinus university, consumers are very pessimistic regarding short term prospects. In December 2008, the consumer confidence index was down by 25 points at 124.4, compared to the preceding six months. A record drop of 52 points was recorded previously in the second quarter of 2006. Expectations regarding the financial position of households were down by 13 percent. Willingness to purchase also dropped by an unprecedented 27 points to 117.6 points. Consumer expectations were down by 24.9 percent. 89 percent of the people interviewed expect unemployment to increase substantially. Expectations regarding inflation show improvement, with only 66 percent expecting further price rises. Another 66 percent expect their income to grow by less than the rate of inflation in the next two years.