“Around 98% of declining insolvency numbers are among small businesses, with turnovers of less than EUR100,000, but that is only statistically relevant. Despite the drop in insolvency numbers, the social and financial impact on the economy is larger as the number of jobs lost due to insolvencies increased 24%,” Guda said at the Coface Country Risk conference in partnership with MEDIAFAX.
The number of insolvencies per 1,000 companies in Romania is the highest in the region, at 45 insolvency companies, four times higher than the regional average .
Guda added only 3% of insolvent companies manage to get reorganized, ten times lower than the regional average.
In the past five years, around 100,000 Romanian businesses went insolvent out of a total of 450,000 companies, meaning roughly one in four businesses was affected by insolvency.
“The number of insolvencies will continue to decrease but that is not relevant as it is large companies, with turnovers of more than EUR1 million, that have a major impact on the economy,” Guda added.