NEWS ANALYSIS : Hungarians Disappointed in Democracy : East Europe: Local election results show many former Communists gaining office.

For the Hungarian people who boldly punched the first hole in the Iron Curtain a year ago, democracy has so far been something of a disappointment.

Frustration with worsening living conditions and disillusionment with the new non-Communist leadership were visible Monday in unofficial results trickling in from local elections held a day earlier.

The vote varied widely among urban and rural precincts, with arch-conservatives and liberals both outpolling the center-right Hungarian Democratic Forum led by Prime Minister Jozsef Antall.

But the electorate’s message was unmistakable: Hungarians are fearful, confused and unconvinced that the current government is capable of guiding them out of crisis.

Voter turnout was so low in most urban precincts that a second ballot will be needed Oct. 14 for more than 80% of the mayoral and city council elections. Of the few constituencies where turnout was sufficient to validate, voters chose candidates from the liberal Alliance of Free Democrats and other opposition parties.

Antall and his coalition government have advocated a measured pace for the transition from central planning to free-market capitalism, hoping to stave off hardships that would be certain if economic “shock therapy” were applied.

But inflation has climbed to 30% and the previously unknown social ill of unemployment now affects more than 100,000 Hungarians, with the most painful steps toward industrial efficiency yet to be taken. Economists predict at least 15% unemployment once the state-owned enterprises now providing hundreds of thousands of jobs are forced to show a profit or shut down.

Payments on Hungary’s $21-billion foreign debt have eaten up state income from the more successful enterprises, and Soviet oil cutbacks have imposed higher fuel costs and fears of energy shortages as the nation of 10.5 million heads toward winter.

A new wave of price increases was announced Saturday. Many voters to stay home in protest.

Rural voters turned out in better force than their urban countrymen, deciding more than 90% of the contests in towns of fewer than 10,000. But they too spurned the government parties in favor of independent candidates. More than 83% of the provincial races were won by independents, many of whom are former Communist Party members.

While few politicians openly advocate a return to socialist economics, the electoral success of the independents reflects a nostalgia for stability, even at the risk of stagnation.

Also among the independents were right-wing radicals and agrarian reform advocates seeking restoration of private property to pre-World War II owners.

National elections in March gave Antall’s center-right coalition a slim majority in Parliament and control of the first freely elected government in Hungary in 45 years. But the fractious body has produced little concrete legislation to encourage free enterprise and foreign investment, often bogging down in partisan disputes and procedural wrangling.

Television has beamed into Hungarian homes unfamiliar and unsettling scenes of opposition lawmakers attacking the government.

“The parties hate each other, which is spreading hostile feeling among the people,” one incensed resident of the town of Balmazujvaros told Hungarian television in explaining why he chose not to vote.

Election burnout was another factor underlying the low turnout, since Sunday’s ballot was the fifth since November for Hungary’s 7.8 million voters. At least 40% turnout was needed to validate each local ballot, but less than 37% voted nationwide.

Turnout was better in the provinces because voters in small towns were more familiar with the candidates, surmised Janos Nemeth, president of the National Election Committee. He also suggested that Hungarians had harbored unrealistic hopes of an economic miracle that would bring them Western standards of living overnight.

The government’s failure to produce visible change, with the exception of increasing numbers of the poor and jobless, disappointed the electorate, prompting voters to support rivals of the governing Democratic Forum.

Janos Kis, head of the liberal Free Democrats, said the urban vote that strongly favored his party and the like-thinking Federation of Young Democrats represents “a major shift in opinion as compared with the parliamentary elections.”

The Free Democrats won only 24% of the March vote for 386 Parliament seats, contrasted with 42% for the Forum.

After the runoff elections in two weeks determine the mayors, city councilmen and regional governing bodies, Hungary will have completed the political transition from one-party rule that the Communists initiated only a year ago.

But opposition control of regional and local governments could put a further brake on parliamentary action, delaying recovery and fueling public resentment over the lack of tangible reward for breaking with Moscow.