March 2 (Bloomberg) -- Hungary’s economic sentiment index plunged to a record in February as businesses struggled with falling orders and consumers braced against job losses because of the global economic crisis, the GKI institute said.

The overall index fell to minus 43, the lowest since measuring began in 1996, from minus 39.8 in January, the Budapest-based market researcher said in an e-mailed statement today. The gauges for business and consumer confidence also fell to new lows.

East Europe is buckling under the weight of the crisis, which slowed demand in key export markets while shutting off investment and credit. Hungary’s central bank expects the economy will shrink as much as 3.5 percent this year and the government sought international aid last year.

“The GKI Economic sentiment index has been plunging for five months,” the institute said in its e-mailed statement. “The deterioration of business expectations even accelerated in February from January.

The outlook for production and orders, especially for exports, led a decline in the business confidence index to minus 34 from minus 20.5 in January. Fifty-eight percent of exports are sold in the euro region, which is in its worst recession since the single currency began trading a decade ago.

Concern about future job losses, the worsening outlook for savings and expectations for household finances dragged the consumer confidence index to a record of minus 68.5 from minus 66.1 in January, GKI said.

IMF Loan

The consumer confidence index has been plummeting since October, when Hungary secured 20 billion euros ($25.7 billion) in International Monetary Fund-led loans to avert a default. Investors had dumped assets deemed riskier during the global credit crunch.

Sentiment in Hungary has been near all-time lows since 2006 when Gyurcsany raised taxes and lowered subsidies to narrow the budget deficit, the widest in the European Union.

Hungary plunged into its second recession in two years in the fourth quarter. In the three months to December, the economy contracted 1 percent from the previous quarter and shrank 2 percent from a year earlier.

The GKI indexes are a balance of positive and negative answers to a series of questions about the outlook for the economy.

To contact the reporter on this story: Balazs Penz in Budapest at bpenz@bloomberg.net.

Last Updated: March 1, 2009 18:00 EST