Small businesses in Hungary are seriously struggling with the country in recession. Inflation in Hungary is the highest in the European Union, while unemployment is rising.

Szouza Feher, a small business owner in Budapest, knows her family's business is at risk.

Hungary's rising inflation, the government's price caps on essential food items, and the energy crisis have squeezed all of their profits.

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"We will have to close at some point. Right now, we don't have enough money to cover our expenses," Feher told CGTN Europe. "This month, we barely made enough to pay the rent, and the bills are piling up."

Feher's family store is located on Rakocsi Street, one of the main thoroughfares in Budapest.

Just a couple of years ago, this avenue symbolized revival and gentrification in the capital, but that has all changed.

"Many shops here are bankrupt, others make small profit margins, it's terrible," points out Feher.

Misleading figures

Despite the grim economic prospects, the government insists the economy is strengthening.

However, economists warn that looking only at GDP and ignoring other economic indicators does not paint a realistic picture of Hungary's financial health.

"The Hungarian figures are a bit misleading since the GDP is not the national income," warns Bod Peter Akos, Former Governor of the Hungarian National Bank. 

"The GDP incorporates the profits of foreign businesses, and in Hungary, German car manufacturers contribute to the GDP, some to the employment, but it is not the national income which is the pay you earn and the local profit that Hungarian business make."

Businesses at risk

And businesses are struggling to survive. According to the Hungarian Trade Association, there are currently 109,000 registered businesses in Hungary, of which the group expects around 4,000 to close by the end of this year.

Small businesses in Hungary employ about two-thirds of the country's population, so a wave of shop closures is certain to mean job losses.

And unemployment is already running at 4 percent - the highest in two years. Hungary's inflation year-on-year is 25 percent, and food inflation is 50 percent.

Productivity has slowed, and the nation's budget deficit has ballooned.

Many economists and business owners say the government's take on the situation does not align with the reality on the streets.

"If the inflation is so high in Hungary, probably the highest in Europe at the moment, how can the economy grow?" highlights Andras Timar, CEO of Welldon Restaurant Consulting.

And as Feher tallies up her losses and counts the days until she has to pay the rent, she worries that soon her store will look like many others on Rackocsi Street, boarded up and abandoned.

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