Analysis:Number of distressed firms, higher at beginning of 2025 than in pandemic year, to increase significantly 

 More than 155,000 companies were in difficulty at the beginning of this year, in various stages - dissolved, deregistered, in insolvency or with suspended activity - a record figure for the last five years, with most of the companies in trouble being in Bucharest and the counties of Cluj, Constanta, Ilfov and Brasov, according to a Sierra Quadrant analysis released on Friday.According to the cited source, the number of dissolved firms has reached a level double that of the economic crisis period of 2008-2009."The economy slowed significantly in 2024, growing by only 0.9%, the lowest in 12 years excluding the pandemic year (2020 - 0.6%). Romania's record-high inflation, tax increases and falling sales have pushed the number of distressed firms to a record 155,207, by 21,950 more than a year earlier. According to RECOM's statistics, analyzed by Sierra Quadrant, this is the worst performance for the Romanian economy since the years after the pandemic (2020)," reads a company press release.In the coronavirus year, when economic activity was severely affected by the restrictions imposed by the COVID-19 virus, 93,706 firms were in difficulty, 61,500 fewer than in 2024.Statistics show, however, that the number of dissolved firms, for example, last year reached its highest level since the previous economic crisis in 2008. While in that year, the Trade Register reported 3,762 dissolved firms, in 2024 there were 46,205, up 18% from 2023.The number of company deregistrations also increased last year, by 16.5% (83,012), while the number of companies that suspended their activity rose by 14.5% to 18,716 companies. The number of insolvencies also rose by 9.38%, to 7,274 companies.According to the analysis, most of the firms that have disappeared from the economic environment are in wholesale and retail trade; repair of motor vehicles and motorcycles, followed by professional, scientific and technical activities, construction and transportation and warehousing.At regional level, the most problematic firms were recorded in Bucharest and in the counties of Cluj, Constanta, Ilfov and Brasov.The significant fall in sales volume, amid the effects of inflation, is in the foreground in almost all economic sectors. The worsening financial gridlock is also one of the reasons why many firms are experiencing financial problems, say the Sierra Quadrant consultants.Beyond the effects of inflation, among the causes of the large number of companies in difficulty are the increase in taxes and duties, the minimum wage, the reduction of supplier credit and limited access to credit.According to experts, how firms manage these risks will determine their survival at a time when economic problems are likely to worsen.According to Sierra Quadrant estimates, the number of distressed firms in various stages of deregistration, insolvency, dissolution or suspension of operations will increase significantly this year, from 155,000 to 170,000-180,000 companies. The reasons are mainly the fall in economic activity and the effect of new restrictions on the activity of micro-enterprises.The results of the 11th edition of the Barometer on the state of the economy, conducted at the end of last year by Frames on behalf of Sierra Quadrant and involving 1,023 entrepreneurs, managers and senior employees in the economy, reveal that 2 out of 3 respondents said they will not open new lines of business and investments this year. 56% of them will focus on restructuring and optimizing financial operations in 2025 in an attempt to adapt to the fragile economic situation, generated by the effects of falling sales, the deepening financial gridlock and significant inflation.Most of the business people surveyed (82%) believe that 2025 will be a difficult year economically, while only 11% think it will be a good year for business.According to analysts, in 2025 more than ever, business expertise will make the difference between companies that will fail and those that will expand and gain unhoped-for market share.