In the developed world growth is already palpable

According to an analysis by credit insurance company Coface Hungary, in the first quarter of 2010 companies’ insolvency indicator augmented by 12 percent, compared with the same period in 2009. However this growth rate is losing speed, thanks to a rather high base level in the past 4-5 years. It also has to do with the end of economic recession in developed countries, despite that recession still reigns in Hungary. The payment morale is still unable to improve. Building/construction and wholesale/retail remain to be the riskiest sectors, but the number of insolvency procedures grew considerably among real estate agencies too. 54.44 percent of procedures are liquidation procedures – up 12 percent – and the number of termination procedures increased by 9 percent.

Payment risks are still expected to grow in Hungary even in the sectors where global trends indicate improvement. In the first quarter of 2010, the number of procedures was the highest in Budapest and Pest County – nearly 50 percent of all procedures in Hungary. András Bagyura, Coface’s commercial expert is of the opinion that the first significant sign of improvement will be when the number of insolvency procedures starts to decrease in absolute value. At the moment, 80 percent of all credits in the Hungarian economy are supplier credits, which constitutes a great challenge.