Economy 29 July 2025, 9:52am

K&H large enterprise growth index falls back to minus 6 points

Portfolio

The K&H large enterprise growth index, which reflects the economic outlook and expectations of large company executives, decreased by 4 points to minus 6 points in the second quarter of 2025, returning to its level at the end of last year, according to K&H Bank's quarterly representative survey.

The survey, which included 200 executives from companies with annual revenues exceeding HUF 2 billion, showed that the index had been continuously improving in the two quarters preceding Q2 2025, nearly reaching positive territory in the first quarter.

The index can range between minus 100 and plus 100 points, with positive values indicating favourable expectations and negative values showing pessimistic outlook. The main index comprises two sub-indices: macroeconomic and corporate.

In Q2, the economic sub-index decreased from minus 17 to minus 25 points compared to the previous quarter, while the corporate sub-index fell by 2 points to 1 point.

Regarding their own companies' economic situation, the proportion of executives expecting deteriorating conditions more than doubled to 26% compared to the previous quarter, while those expecting stagnation decreased by 20 percentage points to 52%. Meanwhile, the share of optimistic executives increased by 5 percentage points to 25%.

According to Tibor Bodor, head of K&H's corporate division, large enterprises are facing challenging times, with neither international nor domestic economic conditions providing reasons for optimism. Rising supplier prices and declining investments from domestic customers are negatively impacting their situation.

The research categorised companies into three revenue groups. Companies with revenues between HUF 2-4 billion expect an average revenue growth of 1.3% over the next year, unchanged from the previous quarter. Those in the HUF 4-10 billion category maintain expectations of 0.4% growth, while companies with revenues exceeding HUF 10 billion forecast 0.1% growth, down by approximately 1 percentage point.

By sector, service providers improved their revenue growth expectations to 3.6%, up by nearly 2 percentage points from the previous quarter. Industrial companies raised their forecast by 1 percentage point to 0.3% growth. However, companies in the commercial sector now predict a 1.1% decline, compared to their previous expectation of 2.3% growth.

On average, surveyed executives anticipate a 0.5% decrease in company profits over a one-year horizon.

The smallest companies expect a 0.5% decline, the largest predict a 0.7% decrease, while medium-sized enterprises forecast a 1% improvement in profits.

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