Central Europe CFOs reach pessimism peak amid uncertainty caused by the COVID-19 pandemic


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Central Europe chief financial officers have reached a pessimism peak as their confidence about the economic outlook and the wider business environment continues to fall amid the uncertainty caused by the COVID-19 pandemic, according to the latest Deloitte CE CFO Survey, conducted on more than 300 leading finance professionals in six countries – the Czech Republic, Estonia, Latvia, Lithuania, Poland and Romania. Almost three quarters of the respondents (72%) stated they were less optimistic about their companies’ financial prospects than before the new coronavirus outbreak, with Polish leading the top of the pessimistic (79%), followed by Romanians (75%). The study also shows significant shifts in the perceived levels of uncertainty facing respondents’ businesses, considering that an average of 36% respondents felt a high level of external financial and economic uncertainty in the pre-outbreak edition of the survey, compared to almost 70%, in the latest edition.

In this context, the majority of CFOs across all industries think that conditions in 2020 and in the beginning of 2021 will not be favourable for taking more risk in financial decisions. Romanians are at the top of the risk-averse financial leaders, with 96% of respondents, followed by Estonians (94%) and Polish (92%).

When it comes to predictions about inflation, most of the respondents foresee growth in consumer price index in their countries, with the highest expected rates in Poland (5.2%) and in Romania (4.7%).

The most significant threat to business over the next year in CFOs view is the reduction in domestic and foreign demand, according to the survey. As a consequence, 62% of respondents expect their companies’ revenues will decrease.

“The current context has reshaped companies’ priorities and, subsequently, those of CFOs. Most of them focus on cost optimization in 2020, while decisions such as hiring new talent or development of human capital, which used to be among their top concerns, are now postponed, just like increase in capital expenditure, expansion by acquisition, introduction of new products and services and expansion into new markets. Coping with the situation seems to be the urgent need,” explained Zeno Caprariu, Audit Partner, Deloitte Romania, and Leader of the CFO Program in Romania.

When asked about the most appropriate ways to finance the business in the current context, CFOs see internal financing (51%) and bank borrowing (42%) as the most attractive sources of funding.

Deloitte Central Europe CFO survey, now at its 12th edition, indicates how financial leaders across the region perceive the future performance of their own businesses in the post-crisis world.

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