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Coface: Business environment kept stable in 2023, number of active companies up 32%

22 February 2024

The business environment was stable in 2023, the number of insolvencies remained constant – 6,650, compared to 6,649 in 2022, and the number of active companies increased by 32%, said Tiberiu Chesoi, claims department manager, Coface Romania.

“What we observe in 2023 is a stable business environment. Stable not only compared to 2022, but also compared to 2019. Honestly, comparing to 2019 I would still see good news through this 6,650 newly opened insolvencies considering that the number of active companies of the economy in that interval has grown by about 32%. So we basically have a larger base of companies in 2023, by 32%. I think that’s good news, just an open insolvency to 2022. Also, a stability a it also shows the half-yearly dynamics in the two years. That is, we have differences of a maximum of 1% in the number of insolvencies in the first semester of 2023 versus the same period in 2022, which again is a positive thing. What we observed in 2023 is an increase in the number of procedures of preventive concordats opened. Although this number of 60 procedures is not an alarming one, such a large one compared to 21 procedures in 2022 is still a notable increase”, said Tiberiu Chesoi, according to Agerpres.

Coface specifies that the evolution of Romania’s economy was marked by “lights and shadows” during 2023, with a slowdown due to the moderation of consumption. Last year, retail sales grew by only 2.2%, below the previous year’s average of 6.2%. Paradoxically, consumption decelerated significantly below the level of the previous year, although the salary dynamics exceeded the average price increase.

Against the background of the tempering of demand and the reduction of cost pressures in the segment of hydrocarbons, energy, grains and construction materials, inflation continued its downward trend until 6.61% at the end of 2023, significantly below the level recorded at the beginning of the year (15% ) or the maximum from the fall of the previous year (16.8% in November 2022).

The main macroeconomic vulnerability in 2023 was the perpetuation of double deficits, the fiscal deficit recorded during 2023 being 89.9 billion lei, respectively 5.68% of GDP, below the initial target of 4.4%. At the same time, public debt exceeded the threshold of 50% of GDP in 2023.

“The year 2023 can be defined as a year of stability for the business environment, without notable increases in the number of insolvencies. Even if we avoided a recession, after a deceleration of real growth to almost 2%, compared to 4.1% in 2022, this being one of the best growths in the region, the economic context remains relatively complicated. Large fiscal and trade deficits can generate risks and vulnerabilities for the population and the business environment. Thus we expect a moderate increase in the number of insolvencies in 2024 caused in particular from the decrease in consumption and the high cost of financing. We follow macro and micro economic developments to be able to support companies step by step with solutions adapted to market dynamics,” said Alina Popa, Coface Romania’s Country Manager.

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