K&H: SMEs are doing better now

By: Trademagazin Date: 2023. 04. 20. 12:18

The K&H SME confidence index continued to strengthen and may slowly reach the positive range, which after a 3-point increase in the first quarter is currently at -4 points. The positive change is due to the fact that companies expect a more favorable turn in the changes in public charges and corporate loan interest rates. However, there is a huge difference in expectations when broken down by company size: micro-companies are stuck in the negative range, while medium-sized companies, after a jump of more than 25 points, already have a very positive view of the year ahead.

The K&H SME confidence index, which indicates the expectations of Hungarian micro, small and medium-sized enterprises for the next year, strengthened again in the first quarter, from -7 to -4 points.

“According to the European Commission’s forecast, the economy, including businesses, will slowly but gradually adapt to higher energy prices and inflation, but growth is expected to remain subdued this year. This is also shown by the K&H SME confidence index, where the background of the current shift lies in the fact that companies view the evolution of public charges and corporate loan interest rates in the next one year much more favorably. The proportion of companies expecting increasing taxes and contributions decreased from 59 percent to 49 percent in two quarters. As for corporate loan rates, we see that businesses have reached a turning point. In fact, in the last two years, interest rates have been continuously increasing, which reached the peak in the history of the index in the third quarter of 2022. At that time, the sector predicted a 5.5 percent interest rate increase. Since then, however, expectations have eased and this value has decreased to 2.5 percent,”

Zoltán Rammacher, head of K&H SME marketing and sales support, detailed the results.