Lack of financing and corruption to slow down Romanian economy, says GfK survey

Romanian managers expect the economy to worsen in the next year due to lack of financing and investments, adding to the brain drain and the decrease of consumer purchasing power, reveals a GfK survey carried out for the Romanian Business Leaders foundation.

The survey involved 171 respondents and was carried out this April online, aiming to gauge the outlook of general directors and entrepreneurs on the economy in the next 12 to 18 months.

The next period will be marked by the difficulty on getting finance and lack of investments according to 77 percent of the respondents. Managers said the euro zone crisis has the potential to worsen, which will increase risk in Eastern Europe and drain investments. Access to bank finance remains tough, while the absorption of EU funds and public investments will not bridge the gap, shows the survey.

Corruption remains a grave factor in the Romanian economy, according to 75 percent of the respondents, while 68 percent said that brain drain will also harm the economy. A decrease of consumer purchasing power is expected by 53 percent of surveyed businesspersons.

Managers mentioned the growing poverty and the aging population s other factors that impact the Romanian society, adding to social polarization and migration.

Dragos Rosca, CEO at Gemisa Investment, said that Romania has lost 3.5 million people due to migration in 35 years, resulting in a loss of around EUR 50 billion in wealth for the country.

Reduced investment in economy/infrastructure and the decrease or stagnation of experts are the main external threats for the economy, while 77 percent said the upcoming local and parliamentary elections could postpone EU funded investments or infrastructure projects in the next 12 to 18 months.

The surveyed manages come from different sectors, including financial services, production, IT & telecom, or construction. Around 30 percent of the managers head companies with more than 250 employees.

Companies are planning to reduce investments in the next period, according to 13 percent of managers, while 12 percent expect the profitability of their companies to decreases. Another 7 percent expect restructuring in their industry sector.