According to the Deloitte CFO Survey Romania 2023, conducted at the end of last year among more than 120 CFOs in our country, companies in Romania are concerned about the slowdown in economic growth, the expected increase in unemployment and high inflation. The survey shows a sharp deterioration in Romania’s CFOs’ expectations for economic growth, with only 17% of respondents expecting the economy to grow by more than 2.5% in 2023, compared to 57% last year. The majority of surveyed CFOs (57%) expect the economy to grow by no more than 1.5%, which, on the other hand, is more optimistic than the average in Central Europe, according to which almost three quarters (73%) of respondents expect economic growth for their country this year is less than 1.5%.

More than half (55%) of CFOs in Romania believe that worsening economic conditions will lead to growthunemployed this year compared to just a third (33%) last year, but again, there is change less dramatically than in Central Europewhere the percentage of those expecting unemployment to rise more than doubled compared to last year (from 33% to 68%), with particularly pessimistic forecasts in Poland, Hungary and the Czech Republic (over 85%).

Almost two-thirds (63%) of CFOs in Romania expect this inflation will increase in 2023 amid supply chain disruptions that have driven up prices for raw materials, commodities, energy and transportation, ultimately driving up consumer prices. Local expectations are in line with regional results (70% of respondents), but the percentages are lower than last year, when more than 90% of CFOs in Romania and Central Europe expected an increase. Inflation expectations for Romania almost doubled from last year, from 5.7% to 11.2% in 2023.

“This year’s survey points to several changes in the perception of CFOs in the country and region, in a context where the optimism seen in the 2022 survey has been tempered by the geopolitical situation, the significant consequences of which are being felt in Europe. due to new challenges arising in supply chains and rising inflation. However, it is important to note that the survey takes into account the expectations of CFOs at the end of 2022, when the economic forecasts of the IMF and the World Bank were more pessimistic than now, and that respondents in Romania were more optimistic than their counterparts in Central Europe. rather, against the background of macroeconomic forecasts for the region, which indicate that Romania will remain among the countries with economic progress, despite the regional economic slowdown,” – said Zeno Căprariu, Deloitte Audit Partner in Romania, Financial Director, Program Coordinator in Romania.

Romanian companies are waiting for us increase in valueespecially with workforce (94%), due to upward pressure on wages in a context in which workers face the consequences of high inflation, with production and provision of services (90%), with transport and with financing (88% each). The only stable costs, according to local CFOs, are VAT and income tax, aspects that indicate the perception fiscal stability.

More than half (55%) of companies in Romania feel a high level uncertaintywhich corresponds to the trend in the region, amounting to approx risk appetite withCFOs to be low. The vast majority of them (86%) believe that now is not a good time to take more risk, and this position is true for companies in all sectors except energy, utilities, mining and consumer staples.

Unlike the situation in Central Europe, the greatest risk for CFOs in Romania remains lack of qualified workers (63%), and then more and more rules (32%), decrease in domestic demand (31%), forecasts regarding the development of the economy (25%), geopolitical risks (23%) and exchange rate fluctuations (20%). At the regional level, geopolitical risks rose to first place among CFOs’ problems (45%).

Although most CFOs in Romania remain optimistic evolution of companies’ incomes (69% expect their increase), more than 40% estimate a decrease in operating profit.

The increase in interest rates has decreased appetite companies for bank lending, according to the study. Only 24% of local respondents still believe that bank loans are an attractive financing option (down from 42% in 2022), while 40% believe the opposite, changes also seen across the region. Internal sources of funding remain the favorites of CFOs in Romania (54%).

The first three priority withfinancial directors from Romania remain cost reduction (27%), organic growth (23%) and digitization (11%), and then expansion into new markets (10%). At the opposite pole, expansion through takeovers is a priority for only 1% of respondents. On the other hand, CFOs in the region no longer see cost reduction as a priority (9%, compared to 20% in 2022) and are now focusing on business growth, either organically (21%) or through existing market development (11%). . Digitalization is also a top priority for 9% of CFOs in Central Europe.

The Deloitte Romania CFO Survey 2023 was conducted from late October to mid-December 2022. Local responses are compared to aggregated data collected from over 620 CFOs in 15 countries – Albania, Bosnia and Herzegovina, Bulgaria, Czech Republic, Croatia, Estonia, Kosovo, Latvia, Lithuania, Poland, Romania, Serbia, Slovakia, Slovenia and Hungary.

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