The rate of insolvencies in Romania is one of the highest in the region, according to a new study by consultancy firm Coface. Last year, 23,665 Romanian companies went insolvent and the number is set to rise by 10 percent in 2013.

In Bulgaria, 1,339 companies went insolvent in 2012, an enormous 243.3 percent increase on the previous year, meanwhile in Poland, 877 insolvencies were reported, 21.3 percent up on 2011.

Romania ranks second in Central Europe for insolvencies, with a rate of 5.67 percent of the total number of active firms, which number close to 420,000. Only Serbia has a higher rate, where the number of insolvencies out of the total number of active firms is 7.93 percent.

“In Romania, corporate sustainability has been eroded due to the financial crisis of the last three years, which has brought high funding constraints and a deterioration of payment discipline in the economy. Consequently, companies have a higher degree of vulnerability in terms of exposure to internal or external shocks and pressure to increase liquidity,” reads the study, quoted by local news agency Mediafax.

Coface expects a worsening situation in the region, with the number of insolvencies increasing, as in Romania, in most countries in Central and Eastern Europe.

editor@romania-insider.com