HANGZHOU, China (Reuters) - German Chancellor Angela Merkel said on Monday she was unhappy about the results of Sunday's regional election, where her party was relegated to third place behind an anti-immigrant party but added her refugee policies have been right all along.

Merkel acknowledged her pro-refugee position in the last year had a lot to do with her conservative party's drubbing in the northern state of Mecklenburg-Vorpommern.

"I'm very unsatisfied with the outcome of the election," Merkel told reporters. "Obviously it has something to do with the refugee question. But I nevertheless believe the decisions made were right and we have to continue to work on them."

(Reporting by Gernot Heller; Writing by Erik Kirschbaum; Editing by Andrea Shalal)