Analysts say unemployment could peak at 11.5% in 2010

Unemployment could peak at 11pc at the end of 2009 and possibly at 11.5pc in the first months of 2010, analysts interviewed by MTI said, commenting on the latest unemployment figures on Thursday.

Figures from the Central Statistics Office (KSH) show unemployment rose to 10.3pc on average in July-September this year, a rate last seen more than 13 years ago when the unemployment rate was 10.6pc in the first quarter of 1996.

Analyst Gergely Suppan of Magyar Takarekszovetkezeti Bank said a rise in jobless numbers was expected, although the rate exceeded the expectation of 10.1pc. Mr Suppan attributed the fall by 47,000 in the number of employed people from June-August partly to the end of seasonal employment. The other reason for higher unemployment is that declining domestic demand forces companies to cut production capacities, he added.

Mr Suppan said further lay-offs could be expected as the wave of bankruptcies has not yet peaked among SMEs producing for the domestic market. Unemployment could reach 11pc by the end of this year, and could peak in early next year at 11.5pc, Mr Suppan said, adding that a slow improvement in employment could begin next year.

Zoltan Torok of Raiffeisen Bank agreed that unemployment has probably not hit bottom yet, and the number of the jobless could rise further in the coming months. This is because companies are slow to adapt to the economic crisis, especially in terms of employment, adjusting staff numbers to decreasing orders with some delay.

Mr Torok said a further 30,000-50,000 people could lose their jobs by the end of this year, pushing the unemployment rate up to 11pc by the end of December. Corporate restructurings can be expected to be completed in the first half of 2010 and demand and orders could pick up towards the end of the first half, Mr Torok said. Unemployment could stay at 11pc in the first months of 2010, he said, but could fall below 10pc again by the end of next year.