At a suffocating pace: the corporate world is still shrinking, but the decline is slowing

The Hungarian economy continued to weaken in the first quarter of 2025, with GDP volume stagnating according to the Central Statistical Office (KSH). Although the government previously calculated an annual growth rate of 3.4%, forecasts have now become much more restrained. The European Commission forecasts an expansion of below 1%, and domestic players also acknowledge that the growth path is far below original expectations.

The biggest challenge is the weakness of industrial output and the stagnation of investments. The automotive industry, one of the driving forces of the economy, is facing difficulties this year as well, with Audi moving part of the production of the Q3 model from Győr to Ingolstadt, while the implementation of the CATL investment in Debrecen is being delayed. Although more favorable expectations have emerged in German industry, the domestic industrial mood remains cautious.

This macroeconomic environment is also reflected in the development of entrepreneurial activity. Negative company trends are slowing down, but the direction is still downward. The number of joint ventures is decreasing, the desire to establish is weak, and although the rate of terminations is decreasing, the traces of structural degradation are still noticeable.

Further declining company stock: subdued dynamics, sectoral differences

According to OPTEN data, the number of joint ventures in June 2025 was 498.7 thousand – the decrease has been ongoing for 21 months. The market shrank by nearly 900 companies in one month, while the number of companies decreased by 6,500 in the first half of the year. The decline mainly affects trade and construction, with 2.4 thousand and 1.1 thousand fewer operating companies registered in the former and the latter respectively, compared to the beginning of January.

The number of new companies founded did not make a breakthrough either, with only 1,592 new companies being founded in June, which is 24% below the May level. Only 11,3 thousand new companies were established in the first half of the year, 6% less than at this time last year. The largest decline in the willingness to establish companies was in trade and professional, scientific and technical activities, with 211 and 222 fewer companies established in these sectors, respectively.

On the positive side, the number of closures is also decreasing, with fewer than 2,500 companies closing in June, down 31% from the previous month and 500 fewer than a year earlier. A total of 17.7 thousand closures occurred in the first six months, down 7% from the same period in 2024. Construction (3 thousand) and trade (4.5 thousand) remain the most affected, but the data does not show any deterioration compared to last year. The administrative and professional sectors also appear to be stabilizing.