K&H: It is difficult for companies to cope with double-digit inflation

By: Trademagazin Date: 2023. 06. 06. 14:26

Inflation above 20 percent affects large companies, the operation of 9 out of 10 companies is negatively affected, according to the latest measurement of the K&H large company growth index. The large rise in inflation is primarily compensated by cost reductions and price increases. In the case of the latter, nearly half of the companies fully incorporated the rate of inflation into their prices.

After domestic demand, inflation is currently one of the most decisive factors in terms of companies’ profitability, according to the K&H large company growth index, which examines the expectations of Hungarian companies with annual sales of over two billion forints for the next year.

“The domestic inflation exceeded 20 percent in September last year, and then peaked at 25.7 percent in January. It is encouraging that a slow decline began after that, but the single-digit value is still to come. According to the European Commission’s latest forecast, the Hungarian annual inflation rate is expected to rise from 15.3 percent in 2022 to 16.4 percent this year, and then decrease to 4 percent in 2024. Double-digit inflation will therefore remain with us for some time, which will largely determine the vision and operation of large companies.”