Romanian CFOs are optimistic about 2016, study shows

The CFOs (chief financial officers) in Romanian companies are optimistic about the country’s economic growth in 2016 and plan to either enter new markets or expand in size, according to the 7th edition of the Deloitte Central Europe CFO Survey which includes Romania. Nearly a quarter of the surveyed CFOs estimate a GDP growth of up to 3.5%, which is in line with the World Bank’s forecast of 3.9%. Meanwhile, 52% of the respondents are starting to see new markets as a source of revenue, compared to 33% last year, and 57% expect the number of employees to increase. However, despite their optimism when it comes to the future of the CEE region, most CFO’s are still cautious when it comes to taking risks: 78% believe it is not a good time to take larger risks, and 76% are looking at internal financing as a source of funding rather than bank borrowing. “Recent changes such as the new Fiscal Code are also well regarded by CFOs as 69% believe these will have a positive impact on their businesses. In the short term, the level of optimism and business sentiment will be influenced by economic and political stability,” said Ahmed Hassan, Partner Deloitte Romania and CFO program leader. Romania could become one of the most attractive economies in Europe depending on its ability to manage a favorable moment, according to Mircea Varga, CFO Tiriac Holdings, one of the biggest groups of companies in Romania. “Despite a discouraging year-beginning marked by global turbulences with main indexes reaching historic lows for the last five years, dramatic de-capitalization of important European banks in the context of discrete adoption of the "bail-in" measure for the European banking system and serious questions concerning the US economy’s entry into a new recession, I remain optimistic regarding Romania’s economic growth in 2016. I believe a 3.5% to 3.8% increase of its GDP is still sustainable,” he said. Bogdan Popa, Vice President and CFO of Raiffeisen Bank Romania, believes that 2016 will bring more competition among banks in their efforts to bring new investment opportunities, particularly for SMEs. According to the survey, almost 70% of the CFOs think that the current tax changes will have a positive effect, 45% think that lack of the required skills is one of the main reasons their company has difficulties in finding qualified personnel, and 33% predicts that CAPEX will focus on IT hardware and software and plant & equipment. When it comes to the top three challenges in the IT sector, 30% of the CFOs expect investment in hardware and software to be one of them. In terms of costs, the direct cost reduction is no longer a priority for 59% of the CFOs, while the indirect cost reduction is somewhat important for 67% of the respondents. When it comes to their companies’ growth outlook, 78% of the Romanian CFOs expect to increase revenues this year. The report represents the views of almost 500 CFOs based in 11 Central European countries, namely Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Hungary, Lithuania, Poland, Romania, Serbia, Slovakia, and Slovenia. The survey was conducted between August and October 2015.