BUDAPEST, Jan 23 Reuters Hungarian business confidence fell in January to lows last seen during the COVID19 pandemic, economic think tank GKI said on Thursday, weighed down by deteriorating prospects in retail and services.

The findings of the survey, which focuses mostly on small business expectations, belies the optimism within Prime Minister Viktor Orban39;s cabinet that Hungary39;s economy is set for a sharp rebound in 2025 after two years of nearstagnation.

Orban, who faces an election in early 2026, expects Hungary39;s economy to grow by 3.4 this year compared with the European Commission39;s 1.8 forecast and GKI39;s 2.5 projection issued in December, which the thinktank says now looks somewhat optimistic.

GKI39;s business confidence indicator dropped to 13.9 in January, easing within the margin of error, but still hitting its lowest point since November 2020, as all subcomponents of the index remained in the red, economist Raymund Petz said.

He said the business confidence indicator had been a fairly good predictor of quarterly economic growth in past years and, barring any major upswing in the coming months, it signalled continued weakness for the first quarter.

These figures indicate that fourthquarter GDP is likely to be poor, with negligible growth. Barring a rebound in February, a sea change in the first quarter is unlikely, he said.

Consumer sentiment also deteriorated in January, with Hungarians turning more pessimistic about their financial…