Liquidity problems were mainly caused by customers paying late, Hungarian company managers said, according to Judit Üveges, Intrum's sales director.Continue reading
The value of the Intrum solvency index declined significantly in the second quarter of this year, with the indicator of the financial situation of the population falling by 22 percent on a quarterly basis and by 10 percent on an annual basis to 35.33 points, Intrum debt management company reported on Monday, according to a joint survey with GKI Gazdaságkutató Zrt.
The data shows that the negative effects of the Russian-Ukrainian conflict and rising commodity prices have spilled over into Hungary, and this is also having a negative impact on the financial situation of the Hungarian population, they said.
Károly Deszpot, director of Intrum CMS, stated that families feel inflation in their daily lives most of all, while economic factors affecting the whole region are also reducing solvency. The uncertainty caused by the war and interest rate hikes are reducing the volume of investment, slowing the rise in incomes, he added.
The Hungarian economy expanded at a very rapid pace in the previous four quarters. The Intra Affordability Index (IFI), calculated on the basis of household income, credit, inflation, and other indicators, tends to predict developments in the national GDP. Based on recent quarterly data, growth is expected to slow in 2022-23, and in some periods the economy could turn into a recession. This is partly due to a decline in domestic consumption as solvency declines, and partly to market uncertainty due to international economic challenges (high energy prices, supply chain weaknesses).
In parallel, they said, the ability of the population to pay could deteriorate until the end of this year, although the extent of this will largely depend on the agreement on EU funding. In fact, the mobilization of thousands of billions of euros could avoid some of the painful measures needed to balance the budget. In addition, balancing the budget could contribute to the stability of the forint exchange rate, thus preventing further price increases, they said.
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