The depreciation of the national currency, the increase in interest rates and the reduction of financing lines, the new wave of inflation generated by the liberalization of the energy and gas markets, along with the effects of a possible increase in taxes, risk leading Romania into a risky situation, with serial bankruptcies in economic chains, shows the Sierra Quadrant analysis.
Most of the business chains are hanging by a thread, experts say, with the greatest vulnerabilities being recorded in wholesale and retail trade, construction, warehousing, transportation and services.
For many entrepreneurs, the decline in sales, reported at the level of the entire economy, has already translated into a significant reduction in business, amplified by the deepening financial blockage.
“SMEs, especially micro-enterprises, are the most affected at the moment. There are over 100 thousand companies in dynamic sectors of the economy, from trade to construction, which are struggling to make ends meet from one month to the next. A possible increase in taxes due to inflation risks leading many of these businesses to insolvency or bankruptcy,” the Sierra Quadrant analysis shows.
According to statistical data from the Ministry of Finance and the Trade Register, the number of companies in difficulty exceeded 160,000 in 2025, some dissolved, deregistered, insolvent, or with their activity suspended. The figure represents a record in the last five years.
“The lack of fiscal predictability adds to the challenges generated by inflation and the decline in sales. Public discussions about the tax reform, which is speculated to result in an increase in VAT, corporate tax, dividend tax, and an increase in excise and property taxes, are adding fuel to investors’ fears.
Unfortunately, against this backdrop, the disintermediation phenomenon has intensified – companies are hesitant to open new lines of business, make investments, and carry out medium- and long-term contracts,” says Ovidiu Neacșu, Sierra Quadrant coordinating partner.
We need professionals
Romania’s economic situation is such that it can only be improved through well-calibrated interventions, through administrative decisions.
Preliminary data from the Institute of Statistics indicate a real stagnation of the economy in Q1, and the prospects are not good for Q2 either.
VAT revenues after the first quarter, for example, were lower than those in the similar period last year, and this indicator, for investors, raises alarm bells.
”If VAT collected is less than last year, it means that the economy has reduced its engines to the breaking point. It is a signal that, in the coming period, solutions must be found to stimulate the economy and increase consumption,” shows the Sierra Quadrant analysis.
Net VAT receipts were 28.6 billion lei, down 2.7% compared to the first quarter of 2024.
“The contraction of these receipts can be explained both by the advance of VAT refunds (+21%), compared to the level reimbursed in the same period last year (8.29 billion lei in January-March 2025, compared to 6.85 billion lei in January-March 2024), and by a high base effect,” explains the Ministry of Finance.
According to Sierra Quadrant, even if the data on budget collection improved in April, the prospects for the second semester require a much more focused approach on reducing evasion and supporting business chains.
“A joint effort by the state and the private sector is needed to support businesses, reduce tax evasion and keep business lines afloat. We need professionals, people with experience and expertise who will come up with concrete solutions to economic challenges in the new government,” the analysis shows.
According to statistical data, inflation, tax increases and a decline in sales caused the number of troubled companies to reach a real record at the end of 2024, at 155,207, 21,950 more than a year earlier.
INS data shows that the economic advance in 2024, of 0.8%, was the lowest in the last 12 years, except for the year of the pandemic (2020 – 0.6%).
Statistics also show that the number of dissolved companies, for example, reached its highest level last year since the previous economic crisis, in 2008.
If in that year, the Trade Register reported 3,762 dissolved companies, in 2024 it reached 46,205, 18% more than in 2023.
The business environment, much more prepared
According to experts from Sierra Quadrant, the Romanian economy is much more prepared to face the challenges compared to the previous crisis.
After the pandemic, many companies reorganized their businesses, restructured their operations and became more resilient to the effects of inflation, declining sales and higher costs generated by inflation.
“Restructuring was the watchword in 2023-2024, especially in the area of large companies. Unfortunately, in the SME sector there are still hundreds of thousands of vulnerable companies with reduced capital, depending on the dynamics of sales and the evolution of the financial blockage.
There is a dire need for preventive measures to restructure expenses, reduce financial exposure, and provide financial buffers designed to provide a safety net,” the analysis shows.
According to Sierra Quadrant data, most companies with problems are in wholesale and retail trade; repair of motor vehicles and motorcycles, followed by professional, scientific and technical activities, the construction sector and transport and storage
At the regional level, most companies with problems are in Bucharest-Ilfov, Cluj, Constanța and Brașov.
“Business expertise will make the difference between companies that will fail and those that will expand and gain unexpected market shares. SMEs in particular need to develop business recovery programs, from restructuring agreements to preventive compositions”, concludes Ovidiu Neacșu.