Kearney report: Romania sees low number of zombie companies amid global surge

Romania recorded only one company classified as a "zombie" in 2023, representing just 1.4% of the 78 active listed companies analyzed, according to new data from Kearney's annual zombie report.

This figure is significantly lower than the global average of 5.8%. Romania is also in a stronger position compared to its Central and Eastern European peers, such as Poland, which reported 26 zombie companies (4% of analyzed firms).

Zombie companies are defined as firms that struggle to cover interest payments on their debt due to insufficient profits, a problem exacerbated by rising interest rates and economic instability.

Kearney's report reveals that the number of zombie companies worldwide has grown by nearly 9% annually since 2010, now totaling 2,370 globally.

Romania's relatively low percentage of zombie companies contrasts with some of the more affected sectors worldwide, such as real estate and travel, which have seen the highest shares of zombie firms at approximately 10%. Despite this, concerns remain about the potential impact of continued economic challenges on the country's businesses.

"In Romania, companies so far seem to do better on average than globally. However, there is still pressure, and it's likely to increase in the near future," commented Florian Teleabă, Principal and Head of Kearney's Bucharest office.

He emphasized the importance of companies restructuring or converting debt to equity as a strategy to avoid becoming financially unstable.

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