Financial prospects for 2009

Financial prospects for 2009 are certainly worse than we had believed before October, when the danger of national bankruptcy was imminent. There is however, so much uncertainty that we should use the conditional mood whenever we speak about future trends. As a result of the financial crisis, a shortage of financing exists. Banks and their clients are faced with a shortage of money to lend. Suppliers find it more difficult to accept 90 day payment terms, because financing and alternative solutions like factoring have become more costly. At the same time, a growing number of companies lose their liquidity completely. Leasing solutions will also be harder to come by, making growth more expensive as well. A drastic drop in demand has taken place, coupled with planned government measures to regulate lending activities more strictly. Prospects are better for companies with substantial cash reserves of their own, but this is not typical of the FMCG sector. Though FMCG products account for 20-25 percent of total consumption, multinationals are faced with similar problems in their home markets which will inevitably lead to rationalisation and withdrawal from markets where returns on investment are insufficient. Both business plans and short terms strategies need to be revised, because a reduction in the number of market players will occur. The need for flexibility and cost efficiency will probably lead to the development or reinvention of alternative forms of commerce where a closer relationship exists between manufacturers and consumers. Alternative forms of financing will become more popular. I would not be surprised to see far less Széchenyi card holders on blacklists than other kinds of debtors.