The latest study conducted by Coface Romania shows that 7,274 new insolvency proceedings were opened in 2024 compared to 6,650 in 2023. Denied payment instruments have increased both in value (+30%) and number (+17%) compared to 2023, but continue to remain below the levels recorded in 2019. Wholesale and retail trade/repairs of motor vehicles and motorcycles sector reported the highest number of insolvencies respectively 1,927.
Economic context - 2024, a year of tensions
Internationally, the economy was affected last year by the two military conflicts: the war in Ukraine and the HAMAS attack on Israel, with geopolitical factors contributing to the economic downturn in the European Union, particularly in Germany. This led to an increase in insolvencies in Western Europe with a cascading effect on other economies.
The evolution of Romania's economy followed the same trend in 2024, when economic growth is expected to be around 1%, after 2.1% in 2023 and 4.1% in 2022. The high inflation rate of 5.1% in December 2024 will put additional pressure on business activity through high financing costs and lower consumption. The main macroeconomic vulnerability in 2025 is the fiscal deficit, which stood at 8.6% of GDP in 2024, compared to 5.68% in 2023.
The year 2024 can be defined as a year of economic deceleration, marked by a large fiscal deficit and a moderate increase in insolvencies. Given the significant fiscal impact on the business environment, we can expect an increase in the risk of fiscal pressures, a declining real consumption, as well as extended payment terms to suppliers, amplifying the risk of insolvency of vulnerable companies. In this context, companies must develop risk management strategies that can respond to the current market challenges"
Evolution of insolvent companies and territorial distribution
The top 3 sectors in terms of the number of companies entering insolvency last year are Wholesale and retail trade/repairs of motor vehicles and motorcycles (1,927), Construction (1,510) and Manufacturing (860) and retain a concentration of around 59% of the total number of insolvencies recorded in 2024.
Of the total number of companies entering insolvency in 2024, about 37% are companies with at least 10 years of activity (established before 2014). At the same time, companies entering insolvency in 2024 had total debts of about 2.5 bn EUR at the end of 2023. We observe in the last 3 years an annual increase of 23% in the number of insolvencies among companies with a turnover between EUR 0.5 M and EUR 5 M, respectively 35% in the case of companies with a turnover of more than EUR 5 M. The 79 companies with a turnover of more than EUR 5 M in 2023 had a total turnover in the above mentioned period of about 1.24 bn. EUR, i.e. more than 54% of the revenue realized in 2023 by all the companies that went insolvent in 2024. According to the financial data, these companies had 10,142 employees, which is about 31% of the total number of employees of the insolvent companies.
If at the end of 2024 the increase in the number of insolvencies was 9.38%, during the analyzed period there was a large variation in the increase in the number of insolvencies compared to the same period of 2023: between 17.16% at the end of August 2024 and 7.17% after the first 11 months of 2024. We expect this trend to continue into 2025. With the new increases in taxes, duties and excise duties, which will affect consumption and the cost of financing, we expect an increasing pressure on the business environment
Most insolvencies opened in 2024 were registered in Bucharest (1,375) and in the counties of Bihor (581), Cluj (529) and Timiș (424). Even though most insolvencies were opened in Bucharest, Bihor county recorded the highest number of insolvencies per 1,000 active companies. Six counties along with Bucharest account for 51% of the total number of insolvencies opened in 2024, up 2 pp versus the previous year.
X-ray of the local business environment
Out of the more than 1.26 million legally active companies, about 690 thousand companies had a turnover above RON 0 by the end of 2023. During 2024, 124,898 legal entities were registered (-15% vs .2023) of which 91,619 LLCs, down from previous years. The number of deregistered companies in 2024 was 83,012, this is the highest level in recent years, an increase of 17% compared to the previous year.
Analyzing the sectoral distribution of registered companies in 2024, we observe a downward trend of the first 7 sectors according to the number of economically active companies, which total 77% of the active companies in Romania, but which attracted in 2024 less than 70% of the total number of registered companies.
In the present study, newly opened insolvencies were considered, based on data published by the ONRC (National Trade Register Office). The analysis of the financial indicators for the firms considered was based exclusively on the financial statements submitted to the MFP during the period analyzed, based on data processed by Coface.
Study conducted in February 2025.
