Romania's Fiscal Instability, Main Challenge for Businesses in 2019

Fiscal instability is the main challenge for businesses this year, influencing investors' appetite for doing business in Romania, according to the KeysFin Business Focus 2019 barometer released Friday.


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Romania's Fiscal Instability, Main Challenge for Businesses in 2019

Romania made over 800 changes in its tax legislation in 2018, culminating with a surprise “greed tax” on bank assets adopted on the fast track in late December. According to the ninth edition of the KeysFin half-year economic outlook barometer, 82% of business managers polled said fiscal unpredictability is the main challenge for businesses in 2019.

Uncertainty over the fiscal outlook grew by 6 points compared with the previous barometer, a sign that taxation issues have since worsened.

If last year, the second biggest concern was inflation, this year it's a drop in investments, as 64% of managers polled expect investments to drop on a worsening macroeconomic outlook.

“2019 will be a year of standby for many investors. The lack of predictability in administrative decisions, the evolution of the currency, constraints in financing and a deepening workforce shortage will significantly influence investor appetite,” the study found.

The poll found 57% of investors see higher lending costs among the main challenges this year, while 43% said the depreciation of the Romanian leu was a major concern, 27% were concerned about higher utility prices,, and 23% about the workforce shortage.

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