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November 28, 2023
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Business Economy Romanian News

Two Out of Three Romanian Companies Face Financial Problems

A study from Sierra Quadrant says that two in three companies in Romania face financial problems every month, and more than 90% of them do not have the capital to withstand a financial blockage of more than three months.

More than 80,000 companies in Romania were in difficulty, in various stages of insolvency, deletion, suspension of activity or dissolution, at the end of August; among the leading causes of the record number recorded being the low capitalization of the business environment and the evolution of inflation, the Sierra Quadrant analysis show.

Moreover, from the analysis of Sierra Quadrant, it appears that more and more Romanian companies are choosing to restructure their businesses within complex projects to optimize logistic and financial flows, a signal that the business environment is preparing for a brutal winter and year 2024 full of uncertainty.

There are more and more companies that hesitate to open new business lines, invest in the development of new partnerships, offer supplier credit, and wait for better times. This phenomenon of disintermediation became even more accentuated with the discussions about taxation, about the increase of taxes, which came to put gas on the fire of investors’ fears.

For 2024, in fiscal changes and uncertainty that tends to intensify, Sierra Quadrant analysts estimate that the economy will operate with the handbrake on.

In the coming year, business people will bet perhaps more than ever on securing business lines, on developing business partnerships with solid, serious, reliable companies. In the conditions where the financial blockage will continue to be at high levels, and financing costs will increase, developing predictable businesses, with reliable partners, will be fundamental for the evolution of the business in a difficult year, with high inflation and with an acute lack of predictability.

Ovidiu Neacșu., Sierra Quadrant

With sky-rocketing inflation and with the Socialists raising taxes in Romania, the economic environment is not the most attractive in the region. This makes the Romanian entrepreneurs struggle to survive the current difficult times and the more difficult times ahead.

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