Domestic businesses are planning cautiously but consciously – VOSZ Barometer business sentiment analysis – Q1 2024

By: Trademagazin Date: 2024. 04. 19. 11:06

Uncertainty is still strongly felt in the business mood of domestic enterprises, said the Secretary General of the Entrepreneurial Interest Representation at the press conference presenting the results of the first quarter of the VOSZ Barometer 2024. László Perlusz added that while the positive change is the radical decrease in inflation, the increase in purchasing power still hasn’t started, despite the considerable increase in real wages at the beginning of the year. The Barometer stood at 53 percent in the first quarter of this year, compared to 62 percent in the same period last year.

Complementing the thoughts of the Secretary General of the National Association of Entrepreneurs and Employers (VOSZ), the director responsible for business relations of the Equilibrium Institute, which carried out the research, said that although several people had previously expressed the expectation that internal consumption could start again with a decrease in inflation, thereby increasing purchasing power, this is now it can already be seen that it didn’t come, people seem to be still waiting. “Even though inflation has decreased, businesses are cautious and are probably still planning for this year,” said Ákos Kozák, who predicted that purchasing power might begin to increase in the second quarter.

Regarding the business sentiment, he also said that he had previously expected a worse result, and although it moved a little in a positive direction, this sub-index decreased over the course of a year.

According to Ákos Kozák, the biggest risk for businesses is a decrease in purchasing power and a drop in demand, and they are cautious about the workforce for the time being, they do not plan layoffs, but they do not really want to raise wages either. At the same time, he still called the radical decrease in investments, which a few years ago in the public and private sector still accounted for 27-28 percent of GDP, while last year the ratio dropped to around 22 percent, and here even 1-1 percent can move hundreds of billions.