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Number of Insolvencies Set to Climb by 20% in 2021

MTI-Hungary Today 2021.10.21.

The number of corporate insolvencies in Hungary is expected to climb by 20 percent this year, edging over 5,150, according to an analysis by credit insurer Euler Hermes.

Tünde Bujdosó, in charge of risk management at Euler Hermes, said the number of insolvencies in the first half rose by 18 percent from the same period a year earlier.

She noted that the number of insolvencies is still lower this year than in 2019, thanks to the faster-than-expected global economic recovery, economic stimulus in Hungary and a quicker return to normalcy in the country because of the high inoculation rate.

However, some sectors remain exposed: the number of insolvencies in the tourism and catering industry reached 190 in the first half, up 36 percent from the same period in 2019; and the number of insolvencies in the construction sector climbed by 40 percent from the same period a year earlier.

Finance Minister Projects 7% GDP Growth for 2021
Finance Minister Projects 7% GDP Growth for 2021

The deficit is expected to come to 7.5 percent of GDP, Mihály Varga said. The government expects inflation to start falling from the beginning of 2022 and sees the situation "normalizing" by the summer of 2022.Continue reading

Euler Hermes expects higher feedstock prices, the chip shortage, supply chain interruptions and pressure to make technology investments will boost the number of insolvencies among local automotive industry suppliers.

Featured photo illustration by László Róka/MTVA