Deloitte Romania CFO Survey: Enjoy the positive macros with care

On the background of a falling unemployment and highest GDP growth in Central and Eastern Europe, Romanian CFOs enjoy an overall positive business climate yet they focus more on consolidation rather than on expansion of their businesses, according to the ninth edition of the Deloitte CFO Survey collecting the input of some of the largest players in the Romanian economy.

“This year’s survey has shown us that Romanian CFOs are tentatively enjoying the current climate, after going through hard times but are looking ahead with caution. It is evident that their lack of enthusiasm towards the near future is very much linked to the fiscal volatility and unpredictable legislation,” said Farrukh Khan, Partner and leader of the program in Romania.

According to the Survey, 60% of the CFOs find the fiscal and regulatory framework as unstable, therefore they will restrict the levels of risk they are willing to take.

“A majority of CFOs note optimism when asked about the overall macro indicators; however, the same does not seem to be reflected into their enterprising spirit when it comes to their investment decisions. Unpredictable fiscal and legislative environment and concerns about availability of enough skilled workforce seems to be of a great concern to address for increase in confidence and help capture potentially lost opportunities,” added Khan.

The survey looks at several aspects such as economic outlook, business environment, costs for companies, financial prospects and digitalization. Though digitalization is on everybody agenda, the Survey has revealed that the awareness regarding its impact and benefits is low.

“Various companies in Romania are in different stages of the digitalisation process. The CFOs interviewed realize that implementing more and more process automation in operations and in finance is important in this age of company digitalization. However, few of them believe their companies are advanced in robotic process automation (RPA), while many CFOs have difficulty in estimating the possible savings to be gained from RPA. The automation of low value repetitive tasks in companies gives an excellent opportunity for the shift towards a higher value tasks to be performed by the workforce, given the current shortage of skilled human capital which is going to stay”, said Zeno Caprariu, Director Deloitte Romania.

Some of the other key findings from this year’s survey include:

• 66% of CFOs believe GDP will continue to grow in 2018
• 91% of CFOs believe that inflation will increase in 2018 which is expected to rise in interest rates and problems with financing their business
• 59% of CFOs consider unstable economic and tax law the greatest risk to businesses in 2018
• 90% of CFOs believe that workforce costs will increase
• 85% of CFOs believe that this is not a good time to take greater risk onto their company’s balance sheets
• 90% of CFOs expect at least the same level of M&A activity in 2018
• 48% of CFOs currently see internal financing as the most attractive source of funding, 36% - bank borrowing and only 27% - EU funds
• 34% of CFOs expect operating margins to increase in the next 12 months, while 37% expect to remain the same
• 68% of the CFOs are actively involved in their companies’ digitalisation strategy
• 49% of CFOs believe the finance function is well or very well prepared for their company’s increasing digitalization
• 66% of CFOs believe that finance functions should have process automation knowledge in order to meet the demands of digitalization
• Only 10% of CFOs think their companies are advanced in robotic process automation (RPA)
• 37% of CFOs expect 10%-40% cost savings as a result of RPA, while 35% are expect below 10% cost savings.

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