Inflationary pressures remain with us

By: Trademagazin Date: 2024. 09. 30. 12:14

Inflationary pressure still does not ease the companies. Although inflation in August was even more favorable than expected, it still represents a difficulty for domestic large companies in terms of operations, according to the K&H large company growth index. The reason for this is that they are less and less able to incorporate price increases into their prices.

August’s 3.4 percent inflation was a positive surprise compared to expectations of 3.6-3.7 percent. With this, the annual average increase in consumer prices could be 3.9 percent this year, and according to expectations, a similar level can be expected next year, around 4 percent, based on the current outlook. Although this value does not seem high compared to the previous double-digit values, even at this level it is difficult for companies to raise consumer prices.

“In the case of large domestic companies, we see that the percentage of companies whose operations are significantly negatively affected by inflation is rising in a trend-like fashion. Most recently, 79 percent of companies indicated that this year’s inflation will negatively affect their company’s operations. The reason for this is that they are less and less able to incorporate inflation into their sales prices, and since the end of 2021, the proportion of companies where they can only increase prices by less than inflation has been rising practically continuously”

– informed Tibor Bodor, head of the K&H Corporate Division, based on the results of research conducted among domestic companies with an annual turnover of over HUF two billion.