2022, most profitable year for Romanian companies, profit increase predicted for 2023

Last year, Romanian companies enjoyed unprecedented revenues and profits, and for 2023, further increases in profits and profitability are predicted against the background of the significant reduction in energy costs, shows an analysis carried out by the business intelligence platform

“In 2022 there was an increase in the total number of companies submitting their annual financial statements, and for the first time in the last 5 years they exceeded the threshold of 810,000,” according to the research on the evolution of the business environment in 2022, carried out by

Against the backdrop of high inflation (over 13%), the revenues of 2022 reached a record level compared to both 2021 and the rest of the analyzed years, namely 2020 and 2019. Thus, the total revenues recorded by the companies managed to exceed for the first time the value of 2,000 billion RON, amounting to 2,392 billion RON.

At the same time, as in the case of revenues, the year 2022 represented a record in the case of profits generated by Romanian companies as well as in their average profitability.

If in 2020, the general profit achieved at the national level was 103 billion RON, being the first year in which the threshold of 100 billion RON was exceeded, in 2021 its value increased by almost 50% – reaching 149 billion RON, and in 2022, it registered a major increase of 50%, reaching over 204 billion RON.

According to the cited source, the profitability of companies in 2022 was based on the emergence of the phenomenon of “greedflation”, an inflation fueled by the increase in prices in an artificial way. Thus, against the background of the increase in the price of raw materials, prices are increased not only to cover the respective price increases, but also to generate higher profits than before. At the same time, the appearance of the labor force coming especially from Asia, which accepts lower wages than the local labor force, generates a reduction in the final cost.

For the year 2023, the increase in profits and profitability is further predicted against the background of the significant reduction in energy costs (electricity, gas, fuel) in the context where prices continued to maintain their values (in some cases even increasing) in the first part of the year 2023. At the same time, estimates indicate a continuation of the process of increasing the share of the cheap labor force, willing to work for wages close to the minimum in the economy at the expense of the domestic one.

The year 2022 was the first year since the start of the pandemic in which the number of jobs in the private sector did not decrease compared to the previous year and remained constant at 4.01 million. However, the number of employees registered last year remains at a lower level compared to 2019, when 4.12 million employees were registered. This decrease in the number of employees in the private sector is based on Romanians’ appetite for entrepreneurship, visible through the record number of active companies, the automation processes, which reduce the need for the human factor, but also the phenomenon of the migration of the Romanian workforce to developed countries, it is shown in the cited document.

The analyzed data take into account the public situation available on July 17, 2023.