FIC Business Sentiment Index: 85 percent of respondents say the business environment in Romania has worsened

The most recent results of the Foreign Investors Council’s (FIC) Business Sentiment Index raise some important worries and leave open a big question mark which can be answered with the next survey in the second half of 2019. For several years now, with each edition of the sentiment survey FIC noted an important dichotomy: companies were expecting strong growth but were increasingly concerned about the predictability of regulatory, legislative and fiscal environment. What is different in the March 2019 edition is that companies continue to be worried about the quality of regulations and lack of predictability but on top, a number of FIC members are more skeptical about the further growth in their business:

• 24% of respondents expect their revenues to contract compare to 14% one year ago;
• 20% expect their business to contract compared to 12% in March 2018;
• Roughly 20% see both their export and domestic markets contracting, double than 6 months ago;
• 30% expect their results for the next 12 months to be worse than the previous, up from 15% in 2018;
• 35% see a decline in their investments compared to 19% in 2018;
• 37% expect to hire less workers compared to 17% one year ago;

FIC underlines that fully 85% of respondents say the business environment in Romania has worsened, the highest number on record yet. Following the OUG 79 at end of last year, the OuG 114/2018 has been a heavy hit to important sectors of the Romanian economy and lead to a big plunge in the stock market both because of its provisions but also because of the absolute lack of dialogue and transparency that characterized it. Businesses now operate in an environment where they expect at any moment an emergency ordinance that can impact their operations and profitability.