Over three quarters of Romanians are hit by economic crisis
Agerpres, Romanian Economic Highlights, June 14. The economic crisis has had a more significant impact upon women, entrepreneurs and employees with higher education degrees, as well as upon people who do not have a job at present, informs Financiarul daily. According to a survey carried out by Mercury Research before the Government’s announcing the austerity measures, over 75 percent of Romanians were hit by the financial crisis, while a quarter of the over 18-year-old men were not affected. However, 20 percent of women were hit by the crisis. At the same time, 9 in 10 entrepreneurs experienced the negative results of the crisis, while 55 percent of the managers or the employees with higher education degrees were affected as well. The people who are currently unemployed also felt the crisis’ impact, 95 percent of these being affected. On the other hand, 66 percent of Romanians are more concerned about their financial situation than they were six months ago, the percentage being lower than in March 2009 (75 percent), but still higher than the one in November 2008, when the first signs of the crisis were made visible in Romania and when only half (53 percent) voiced this fear. The main concerns are related to the impossibility of preserving the same lifestyle as the current one (40 percent), the decrease in incomes (39 percent) or the insecurity of handling the current expenses (38 percent). The concerns related to the impossibility of paying the installments apply to 15 percent of over 18-year-old Romanians, while 14 percent fear they would not be able to save or to invest as in previous years. As for the evolution of the banks’ financial stability in the next semester, the share of those believing the situation will worsen dropped from last year, from 61 percent to 40 percent.
Number of insolvent company doubles in Q1 2010
Agerpres, Romanian Economic Highlights, May 17. Over 18,400 companies were declared insolvent in 2009, up by 27 percent compared to 2008, and the number of insolvent companies doubled in the first quarter this year, according to a survey conducted by Coface Romania, informs a release of the company. The sectors that reported the highest number of bankruptcy cases, wholesale and distribution, retail and construction, account for 53 percent of the total bankruptcies registered in 2009 that reached 9,682 cases. The Coface survey took into account the companies that initiated the bankruptcy procedure, companies in progress of legal reorganization and firms that had the bankruptcy procedure concluded due to the lack of assets, irrespective of the year such procedure had been initiated. According to the same source, the main driving forces of the economy over 2004-2008, trade and construction sector, collapsed in 2009, thus generating a 7.1-percent drop in the GDP, as they were also the segments worst hit by the crisis that report the highest number of insolvencies. This year is predicted to be another difficult year for the players on the construction market, given that 48,833 building permits were issued in 2009 for residential buildings, down by 20.1 percent against the same period of the previous year. Investments in the national economy dropped by 30 percent against 2008, according to data provided by the National Statistics Institute (INS). The industries hardest hit by the 2009 crisis were metallurgy, health and social assistance, financial brokerage operations, real estate transactions, agriculture and personal services. According to Coface, the statistical data show the beginning of the year is extremely difficult, as the economy still reports a downward trend. The latest data note consumers’ confidence continues to be very low, as the rapid increase in the unemployment rate, the fears concerning future layoffs (especially in the public sector), restrictive lending and the drop in the net earnings determined the population to be much more reserved in spending. In addition to the worsening economy that generated this situation, with companies reporting increasingly less resources for protection against creditors, the extremely large deadlines (of even 6 months) approved by the courts, as well as the deferrals recorded in 2009 due to the magistrates’ strike have contributed to the rise in the number of insolvency cases by nearly twofold against the same period last year, when 5,173 companies were undergoing insolvency procedures. Coface believes these aspects will determine a record number of insolvencies in 2010.
Trade and industry, worst hit by financial gridlock
The number of companies declared insolvent in Romania in the first quarter hiked by 27 percent, to over 6,250, while nearly 20,000 companies have suspended activity, according to the data of the National Companies Registry Office (ONRC). “I believe more than 80 percent of the companies that were declared insolvent will go bankrupt. There are many firms that have not yet recovered their money from the state: VAT refunds, the payment of the works performed by the companies to the state authorities. However, the National Tax Administration Agency (ANAF) has asked the companies unable to pay their taxes to perform the payment,” said Florin Pirvu, vice-president of the Romanian National Private Small and Medium Size Enterprises Council (CNIPMMR), quoted by the Ziarul financiar daily. The number of companies that were declared insolvent went up in March to 2,152 against 2,082 in January and 2,022 in February. As many as 4,925 companies were declared insolvent in Q1 last year. Most insolvency cases were reported in Bucharest (825), followed by Bihor (western Romania – 345) and Cluj (Romania center – northwest – 325). The number of companies that suspended activity in Q1 surged to nearly 20,000, by 4.5 times more than in the same period of 2009. Most companies unable to pay off their debts operate in the trade sector, accounting for more than 40 percent of the businesses that were declared insolvent over January – March 2010, followed by the processing industry (16 pct), while the construction sector accounts for 15 percent. Some 2,655 voluntarily declared insolvency January through March this year, double compared to 2009, while the number of voluntary deregistrations increased from 9,954 to 9,186. Around 1 million companies operate on the local market, reads the publication. Source: Agerpres.
National rail freight carrier CFR Marfa faces drop caused by economic crisis
National rail freight carrier SNTFM CFR Marfa SA hit 901.26 million lei in total revenues January through October 2009, that is only 60.45 % of the figure in the same interval last year, mainly due to the cut by some of its most important customers in the quantities of merchandise transported, reads a release of the Ministry of Transportation and Infrastructure (MTI). The drop in the national company's revenues was mainly due to the cut in the freight volume transported for some clients (a series of important clients of CFR Marfa cut or even completely ceased their activity beginning with October 2008, which led to significant fall on such merchandise segments connected to the metallurgical industry, the cement and other construction materials industry and the wood industry), due to some companies partially or even completely ceasing their activity (important clients of CFR Marfa like Arcelor Mittal Galati, Oltchim, Doljchim, Azomures, Otelul Rosu), as well as due to the tough competition represented by the private railway operators and the road ones. All these reasons led to lower freight volumes being transported, compared with the same interval a year before. According to the balance sheet of CFR Marfa, as made public by the MTI, the company's turnover stood at 869.2 million lei January through October, 2009. The total expenditures recorded on October 31, 2009, represented 72.888 % of those corresponding to the same intervals in 2008, with spending on the exploiting activity representing 97.45 % of the total spending. On the same date, as an effect of the cut in the volume of services, CFR Marfa recorded loss worth 230.39 million lei. The total debt of CFR Marfa on October 31, 2009 represented debt to the consolidated state budget worth 383.69 million lei, commercial debt to suppliers and various creditors worth 315.83 million lei and debts to credit institutions worth 441.78 million lei (syndicated loan worth 427.88 million lei, loan from the European Bank for Reconstruction and Development worth 13.89 million lei). Commercial claims of CFR Marfa on October 31 2009 account for 393.55 million lei. Source: Agerpres.
