K&H: There is a big gap between inflation and the financial expectations of SMEs

By: Trademagazin Date: 2023. 06. 15. 10:39

After the slight improvement in the previous quarter, businesses are again expecting a smaller increase in sales and profits: an average increase of 8 percent in revenue and 3.3 percent in profit is expected in the next one year. Thus, extracting inflation may still cause difficulties – the latest results of the K&H SME confidence index for the first quarter of 2023 show. Due to more solid financial expectations, the investment intention also decreased. 6 out of 10 companies are planning development, and within this, mainly IT and machine purchases are expected in the next 12 months.

The difference between the rate of inflation and the planned financial results of SMEs is still large, according to the latest data from the K&H SME confidence index, which indicates the expectations of Hungarian micro, small and medium-sized enterprises for the next year.

“Following the slight improvement in the previous quarter, the companies are again expecting a more modest increase in sales revenue and profit. An average increase of 8 percent in sales and 3.3 percent in profit is expected in the next one year, compared to 8.6 and 4.4 percent in the previous quarter. The companies therefore still do not expect strong financial results, which is compounded by the fact that the expected growth is well below the extremely high inflation of around 20 percent for several months. In the current economic environment, it is therefore even more important that company managers review their business model and consciously plan their costs and expected revenues”

– pointed out Zoltán Rammacher, head of K&H SME marketing and sales support.