State of Hungarian SMEs called unhealthy

The government's austerity measures will set back SMEs by Ft 700 billion next year in the form of higher taxes and other related payments, Mikael C. Szabo, CEO of credit insurer Coface told a Thursday conference. "I am not sure if I could recommend 1,000 SMEs worth investing in," he added, underlying the unfavorable trends in the structure and fiscal position of smaller companies.

Another problem is that by EU norms, the number of SMEs should be around 10,000, far less than the 1.1 million registered businesses currently in Hungary. In the EU, an SME is a company with annual sales of between Ft 520 million and Ft 2.6 billion, while in Hungary some 78% of businesses have less than Ft 20 million turnover a year, he added.

Most SMEs depend on multinational companies, Szabo observed, but the vast majority have problems in their business relations with them, citing late payment of invoices. The contribution of SMEs to exports is low, as half of such companies are in the retail trade.

The lack of basic business skills, as well as poor fiscal discipline, is also hurting companies, Szabo said.

The above story is just one of more than two dozen published today by Hungary Around the Clock, the most comprehensive source of daily English-language news about Hungary. For a free trial of HATC, click here. Hungarian news sources include Népszabadság; Magyar Hírlap; Világgazdaság; Napi Gazdaság; Magyar Nemzet; Népszava; Kossuth Rádió news and Hungarian television's nightly news broadcast.

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