The number of companies becaming insolvent in the first half of this year is lower by 25% against the same period last year, i.e. 4,291 and for the full year it is estimated at 7,800 companies, the lowest level in the last 10 years, Iancu Guda, Chief Economist and Services Director with Coface Romania said on Wednesday.
“According to the Coface methodology, we have identified 4,291 insolvent companies in the first half of this year, down by 25% as compared to the same period last year. Coface estimates for the entire 2016 the total number of insolvencies to 7,800, which represents a new low for the past ten years. Previously, in 2015 was recorded the lowest number of insolvencies, namely 9,230,” Iancu Guda said, quoted by Agerpres.
Regionally, namely in Central and Eastern Europe, the number of insolvencies has decreased in 2015 by 27%, to 46,602 companies.
“Romania registered the largest decrease in the number of insolvencies in CEE in 2015, namely 50% and the contraction estimated for the entire 2016 is of 23%. Despite this, Romania will remain in 2016 the 3rd country in terms of insolvencies incidence to 1,000 operational companies (18), almost by 2.5 times higher than the average level in CEE,” said the Coface representative.
“The losses due to insolvent companies in 2013, 2014 and 2015 remained constant in all years, although the number of companies joining this procedure has decreased. So have the number of jobs lost. Instead, in 2016 we see a diminution of the financial and social impact,” Iancu Guda said.
However, the number of companies with turnover of over EUR 1 million becoming insolvent in the past five years in Romania is very high, i.e. 814, given that Romania has only 5,000 such companies that generate 70% of the turnover nationwide.
By sphere of activity, in H1 this year, most companies that became insolvent are in wholesale and distribution (740), followed by those in retail (713), constructions (671), activities and services for enterprises (318), hotels and restaurants (291) and transportation (267).