Late payment and circular debt in Hungarian business life
This analysis by IEER concerns the experience of Hungarian businesses with late payment and circular debt. The results are based on IEER's July 2019 Quarterly Business Climate Survey, which involved 404 domestic respondents. Based on the answers, 68,6% of businesses had at least one partner that paid late in the first half of 2019, and 34% of respondents made late payments themselves to their suppliers in the examined period. The issue of late payment most often hits large companies (with more than 250 employees) and industrywise construction and providers of other business services are the most affected. All-in-all it can be inferred that the after the favourable period last year, the trends in having more business partner who pay late is starting to creep back to its prior 2018 level. By the same token, proportion of their income arriving late has become threefold, compared to the last period measured. However, the number of companies that failed to pay in time to their suppliers at least once due to the late payment of their customers basically remained unchanged since July 2018.
In the course of IEER's July 2019 Quarterly Business Climate Survey, 404 domestic respondents were surveyed about late payment and circular debt.
68,6% of the surveyed companies had at least one business partner that paid late multiple times in the first half of 2019. As it could be observed in Figure 1, the rate of the same companies was 55% in the second half of 2018 and 63% one and the half year before, in 2018 January meaning that the amelioration of the previous period was not here to stay and the ratio is resembling more to its levels prior 2018 July. The proportion of companies with more than half of their partners paying late also increased considerably. In July 2019, 10% of companies were such, whereas the same ratio was much lower before: 2% and 3% in July 2018, and January 2018, respectively.
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