World Bank: A quarter of state companies are practically bankrupt

These companies gather 24% of the total number of 413,859 employees in state companies, have accumulated 60% of the total value of arrears and receive from the state 18% of subsidies. In these conditions about 100,000 persons will be left jobless if the companies went bankrupt.

At national level, state companies generated 11% of gross VAT and their arrears amounted to 28 billion lei, the equivalent of 5.5% of GDP. According to Ionut Dumitru, the head of the Fiscal Council, arrears in the private sector are higher – 13.5% of GDP and are at the same time distributed to the private sector.

'At this moment nobody knows how many state companies are in economy. We have identified about 760 but there are more, around 1000,' Dumitru said. According to the study, each employee in the private sector produced last year an average gross profit of 370 lei, while in state companies there were losses of 7,000 lei at local level and 22,000 lei at central level per each employee. State company losses of 0.5% of GDP had a negative impact of 2.5% on incomes to the general consolidated budget.

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