K&H: recession fears among large companies

By: Trademagazin Date: 2023. 11. 21. 13:44

The K&H corporate growth index, which indicates companies’ expectations, remained unchanged at 0 points in the third quarter, but the macroeconomic outlook deteriorated considerably. In the short term, nearly half of the companies expect an economic downturn, and serious concerns have arisen regarding a possible weakening of the forint and the rise of public burdens. Regarding the prospects of their own company, they expect a slight improvement, which is mainly due to higher sales revenue expectations and the intention to increase the number of employees.

Towards the end of the year, the momentum of the companies clearly stopped. The K&H large company growth index, which examines the expectations of Hungarian companies with an annual turnover of over two billion forints for the next year, is once again at 0 points in the third quarter.

“In the second half of 2023, favorable processes in the economy already started, which gave cause for confidence: inflation decreased to a large extent, raw material prices moderated, and the corporate credit market also began to grow – albeit with slow dynamics. However, the high interest rate environment and declining domestic demand continue to pose a serious challenge to companies, which was even reflected in the negative GDP result at the time of the survey. And all of these left their mark on companies’ expectations regarding the macroeconomics”

– said Gábor Rajna, head of the K&H Corporate Division.