Intrum: after an upward trend, the solvency of the Hungarian population has decreased
The value of Intrum’s solvency index fell significantly in the second quarter of this year, with the people’s financial condition indicator dropping 22% on a quarterly basis and 10% on an annual basis to 35, 33 points, Intrum Debt Management company reported Monday, according to a joint investigation with GKI Gazdaságkutató Zrt.
The data shows that the negative effects of the Russian-Ukrainian conflict and rising commodity prices have spread to Hungary, which also has a negative impact on the financial situation of the Hungarian people, they said.
Károly Deszpot, director of Intrum CMS, said families are mostly feeling inflation in their daily lives, while economic factors affecting the whole region are also reducing solvency. Uncertainty caused by war and interest rate hikes reduce investment volume, slowing income growth, he added.
The Hungarian economy has grown at a very rapid pace over the past four quarters. The Intra Affordability Index (IFI), calculated on the basis of household income, credit, inflation and other indicators, tends to predict the evolution of the national GDP. Based on recent quarterly data, growth is expected to slow in 2022-23 and, at times, the economy could slip into recession. This is partly due to lower domestic consumption as creditworthiness declines, and partly due to market uncertainty due to international economic challenges (high energy prices, supply chain weaknesses).
At the same time, they said, the population’s ability 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, mobilizing trillions of euros could avoid some of the painful measures needed to balance the budget. In addition, balanced budgets could contribute to the stability of the forint’s exchange rate, thus preventing further price increases, they said.
Featured image: illustration via Pixabay
