K&H Bank SME confidence index falls to lowest point since onset of crisis

Analysis

K&H Bank’s quarterly index of SME confidence declined 18 points in the fourth quarter of 2011 to minus-44 points, the index’s lowest reading since the onset of the global financial and economic crisis, the bank reported on Wednesday.

Pessimistic expectations mostly concern the outlook on economic policy, taxes and banks’ interest rates while expectations on accessibility of EU funding improved slightly, K&H commented. Economic events and economic policy measures in recent months "have left confidence of SMEs in tatters", the bank said.

The index, started in 2004, which is based on a survey of 700 SME managers, has dropped in four of the past five quarters since reaching a historical high of plus-6 in the second quarter of 2010 as a result of small- and medium-sized businesses’ positive reception of the newly elected Fidesz-KDNP government’s economic action plan.

The index last rose in the second quarter of 2011, when it climbed eight points to minus-12.

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