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Romanian retail market to feel effects of economic crisis in 2009

The Romanian retail market will feel, in 2009, the effects of the economic crisis, when the effect of substitution of products will be experienced, and the players in this sector must not think of state aid, said, on Tuesday, at a conference, Liviu Voinea, executive director of the group of applied economics (GEA).

'The evolution in the economy has mainly relied on consumption, and the toughening of crediting and its getting more expensive and the fall in consumption will show their negative consequences still more in 2009. In the past years, we have borrowed money from abroad, through banks in Romania, to purchase goods also from abroad. Moreover, the rise in consumption has been based on loans, which has led to an unhealthy economic growth. The population will understand soon that the crisis can be overcome not by over-consumption, but by saving, ' Voinea stressed.

Market studies show that the financial stability of people is falling, with an important role in this process being played by the diminution in the market value of buildings. In 2009, an bigger and bigger number of consumers will switch from luxury products to cheap ones, and the retail market will be affected also by a differentiated TVA level.

The drop in the profit margins, the adjustment of sale spaces to the new market conditions and funding from or to suppliers are the main ways recommended by economic analysts to retailers for overcoming the crisis.

'In the next two years, we will see a decline in demand in the retail market, a fall in operational profitability, an explosion in the default rates, but particularly the impossibility of financing from loans from banks. After the parliamentary election, the new government will have to toughen the fiscal policy, with the budget deficit going up,' said Dragos Cabat, from the Association of Financial Analysts CFA Romania.

The conference 'Romanian Retail Forum 2008 - the trends in the retail market in Romania, in the context of the world economic crisis' has analyzed the evolution of the sectors of retail and consumer goods in 2008 and put forth the forecasts for 2009.

 

Sursa: http://www.rompress.ro

Tags: market crisis economic retail tva

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