RSS
Coface Romania improved the rating of business environment for the first time since 2009 from B to A4
Coface Romania improved the rating of Romania as regards the risk of the business environment from B to A4 for the first time since 2009 until now, but they draw attention with regard to the fact that the positive evolution of the business environment is generated exclusively by consumption, fact which can lead to future imbalances, stated on Wednesday Eugen Anicescu, country manager Coface Romania.
‘The last amendment of rating for Romania took place in 2009 when, due to the financial crisis,from A4 (investment grade) got to class B. Then the frequency and consistency of payment incidents increased.In 2016, we come back to A4 when Coface operated an upgrading of rating for four countries in Eastern Europe: Romania, Slovenia, Lituania and Latvia, two from B to A4 ( Romania and Latvia) and two from A4 to A3 (Lituania and Slovenia)’explained Anicescu.
The Coface rating measures, practically the risk of the business environment, the apparition of payment incidents between companies and it is very important for the companies which want to invest in a country.
Thus,Romania moved from an instable political and economic environment, capable to affect the history of payments already slim, to a history of mediocre payments, which can worsen due to the political and economic environment which deteriorates. Even so, the probability for non-payment in countries with rating of A4 is acceptable, consider the representatives of Coface.
Under these conditions, they draw attention on the fact the improvement of the rating was produced exclusively on behalf of the increase of consumption, which brought more money on the market, improved the liquidity of the companies and implicitly, the payment behaviour. Thus, if at macroeconomic level there is no correlation of consumption with the productive branches (industry, constructions, etc.) there will take place a non-sustainable increase of imports.
According to Anicescu, the continuation of the reduction of the general quota of TVA according to the provisions of the Fiscal Code at 19% next year, is not appropriate, the authorities should consider a package of investment incentives.
The Coface representative said that in the first five months of this year,there has already been an increase of imports double against exports, 10% respectively against the similar period of last year, while imports advanced by only 5%.
Coface considered that the strong points of Romania are represented by the dimension of the domestic market, the cheap and qualified work force, the foreign currency reserve and the relatively stable local currency agains the euro, the level of public indebtedness under the level of the EU and the reduced energy dependence on a foreign level.
In exchange, our country faces the decrease of population ( active emigration among the qualified personnel) the reduced level of income as percentage in GDP as compared to the high level of underground economy, the land infrastructure and very weak logistics, corruption and the reduced entrepreneurial spirit.