Although insolvency numbers were lower, the economic impact was higher as companies that went insolvent had total assets of EUR1.5 billion, 28% higher than in 2019, and affected 11,717 jobs. Companies that went insolvent in 2020 also had a total turnover of EUR937 million, 24% higher compared with 2019.
Insolvency numbers in Romania have been decreasing for the past seven years but the drop in insolvencies in general, by 12% from 5,830 in 2019 to 5,144 in 2020 is mainly due to deferrals, tax facilities offered by the government to stave off the effects of the pandemic and lack of specialized court activity, CITR noted.
While the pandemic directly impacted certain industries, such as hospitality and transport, in 2021 CITR estimates a domino effect spreading to related industries such as automotive, car parts manufacture, aviation, tourism, meat and dairy production and animal husbandry.
The number of companies on the brink of insolvency is expected to grow to an eight-year record, a similar level to that in 2013, as the financial effects of the health crisis have been delayed by government support.
Sectors with the most high-impact companies under insolvency and restructuring in 2020 were industry (26%), trade (14%), energy (10%) and agriculture (10%). The most affected counties were Bucharest-Ilfov (40%), Brasov (6%) and Cluj (5%).