Explosion of insolvencies: 7,274 companies became insolvent last year

According to the annual study conducted by Coface Romania, in 2024 there was a 9.38% increase in the number of companies that became insolvent compared to 2023. This concerns 7,274 companies that became insolvent insolvencies last year, compared to 6,650 in 2023. An alarming aspect of this phenomenon is the 75% increase in insolvencies among companies with a turnover of more than 5 million euros, according to the cited study.

Tiberiu Chesoi, Head of Claims Department Coface Romania, stated: "If at the end of 2024 the increase in the number of insolvencies was 9.38%, the monthly variations were significant, with a peak of 17.16% in August and a more moderate increase of 7.17% after 11 months. Against the backdrop of the new tax and excise increases in 2025, the business environment will face additional pressure".

At the same time, rejected payment instruments increased in value (+30%) and number (+17%) compared to the previous year, although they remain below 2019 levels. The sector with the highest number of insolvencies remains wholesale and retail trade, with 1,927 cases, followed by construction - 1,510 insolvencies and manufacturing - 860 insolvencies. According to the study, these three sectors accounted for approximately 59% of total insolvencies. Moreover, approximately 37% of the companies that entered insolvency in 2024 had been in business for over 10 years. The total debts of insolvent companies at the end of 2023 were approximately 2.5 billion euros.

Large companies in insolvency had a cumulative turnover of 1.24 billion euros, representing 54% of the total revenue generated by companies that entered insolvency in 2024. These companies had 10,142 employees, i.e. 31% of the total number of jobs affected by insolvencies.

From a geographical point of view, the most insolvencies were registered in Bucharest - 1,375 cases, Bihor - 581, Cluj - 529 and Timiş - 424 cases. Although Bucharest had the highest number of insolvencies in absolute values, Bihor county was the most affected in relation to the number of active companies, with a rate of 13.9 insolvencies per 1,000 active companies.

The situation is dramatic if we take into account the fact that, as Tiberiu Chesoi told us, in the last seven years, out of all the companies that entered insolvency, only 2% managed to recover, and of the remaining companies, some are still in the recovery procedure, and others were forced to declare bankruptcy.

• 8.6% increase in consumption, not reflected in economic growth

This whole situation was caused by the fact that 2024 was marked by major economic difficulties, both internationally and nationally, according to Alina Popa, Country Manager Coface Romania. She stated that the situations in Ukraine and the Middle East strongly affected the global economy, and the European Union, especially Germany, experienced an economic decline that was also reflected in Romania.

Alina Popa stated: "The year 2024 can be defined as a year of economic growth deceleration, marked by a large fiscal deficit and a moderate increase in the number of insolvencies. In this context, companies must develop effective risk management strategies to face economic challenges." The report prepared by Coface Romania shows that Romania's economic growth moderated to 1% in 2024, after 2.1% in 2023 and 4.1% in 2022. High inflation, of 5.1% in December 2024, put pressure on companies through high financing costs and reduced consumption. In addition, Romania's fiscal deficit reached a critical level of 8.6% of GDP in 2024, compared to 5.68% in 2023.

Bogdan Nichişoiu, Head of Financial Analysis at Coface Romania, said that the lack of competitiveness amid a budget deficit of almost 9% of GDP represents our country's main vulnerability last year.

"Although consumption increased by 8.6% in 2024, this was not reflected in economic growth last year, which was only 0.9%, which means that many of the products whose purchase led to increased consumption are not produced by companies in our country. We believe that we will also witness an increase in consumption in 2025, but at much more moderate rates, since we will no longer have the growth of 13.1% of the nominal wage and 8% of the real wage that occurred last year. The nominal wage will increase in 2025 by 8%, and the increase in the real wage will be below 2%", stated Bogdan Nichişoiu.

The Coface study also mentions that, of the 1.26 million legally active companies, approximately 690,000 reported a positive turnover in 2023. In 2024, 124,898 companies were registered, down 15% compared to 2023. The most affected were limited liability companies (SRL), which recorded a decline in registrations compared to previous years. On the other hand, the number of companies deregistered reached 83,012, the highest level in recent years, with an increase of 17% compared to 2023. The sectoral distribution of new companies shows a decrease in registrations in the top seven economic sectors, which represent 77% of active companies in Romania, but which attracted less than 70% of new registrations in 2024.

The Coface Romania study also shows that for 2025, risks remain significant, given the impact of new tax measures and global economic volatility. In this context, it is essential for companies to adopt effective risk management strategies and optimize their financial structure to face future challenges.