Hungarian SMEs are regaining their lost confidence on the back of a surge in domestic demand and improved business conditions. This was further corroborated by the K&H Bank's SME confidence index, which climbed 6 points to -28 for the second consecutive quarter this year.
Positive business sentiment has been triggered largely by the sustained efforts made by the Hungarian government to revive the economic conditions and offer SMEs some relief amid the challenging times.
According to the K&H Bank, the fiscal policy measures and an improved outlook for corporate lending conditions have made SMEs more optimistic about their business and growth prospects.
K&H Bank's SME confidence index further reveals that the majority of the small businesses in Budapest and other parts of Hungary are becoming more confident of witnessing a stable economy in the near term.
Nearly 41% of SMEs feel that the forint's exchange rate will stabilise, as opposed to 33% who believe that it might weaken further. The majority of the businesses are hopeful of seeing improved prospects, with many of them expecting 2.3% revenue growth, on average.
Barring the farm sector, the business outlook has improved for SMEs in other sectors like the trade, services and industrial sectors.
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Saurabh Garg
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