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Shrinkage of private sector seen as natural process

The Hungarian private sector is shrinking, at least in terms of the number of companies that have been launched or closed. Company information provider Opten registered more company closures than launches in the second quarter of 2018.

Between April and June this year, Opten registered 6,622 new companies and 8,352 closures, which resulted in a decrease of 1,700 Hungarian companies in just one quarter, business daily Világgazdaság reported.

The figures are not surprising, as they fit the trend of recent years, Richárd Pertics, company information director at Opten, told the paper. The good news, he added, is that the number of companies closing with liquidation is lower, but the bad news is that the collection of claims by creditors can take years and in some cases is impossible.

The highest ratio of closed companies to launched ones is in Budapest and the surrounding Pest County, as well as in the eastern part of Hungary, while the healthiest rate is in the western region, in areas closer to Austria. This also reflects the general economic development of the country, notes the report.

All in all, the situation is much better than in the period before 2014, when 40,000-50,000 companies were started every year, most of them without a business plan and a very short life expectancy, Pertics observed.