Big business outlook deteriorates as inflation accelerates

Analysis

Outlooks of big Hungarian companies declined further in the first quarter as inflation continued to climb, state news wire MTI reports, citing a gauge of confidence by banking group K&H.

K&H's big company growth index stood at +2 points in Q1, falling 4 points from the previous quarter. K&H said the index, which gauges outlooks on a scale of -100 to +100, could fall further if the situation in Ukraine is not resolved.

K&H noted that the measure of big companies' outlooks for the economy as a whole slipped 8 points, while the gauge of expectations regarding their own performance edged down 2 points.

The share of companies that expect negative change in the coming twelve months rose to 23% from 12%.

Close to two-thirds said the forint would continue to weaken in the next half year.

Companies put growth under the rate of inflation and augur stagnating profit.

Around 30% expect tax cuts in the coming year, up 5 percentage points from the previous quarter.

The survey was based on responses from 200 private sector companies with annual revenue over HUF 2 billion.

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