Central Europe chief financial officers have reached a pessimism peak as their confidence about the economic outlook and the wider business environment continues to fall amid the uncertainty caused by the COVID-19 pandemic, according to the latest Deloitte CE CFO Survey.
The study was conducted on more than 300 leading finance professionals in six countries – the Czech Republic, Estonia, Latvia, Lithuania, Poland and Romania.
Almost three quarters of the respondents (72%) stated they were less optimistic about their companies’ financial prospects than before the new coronavirus outbreak, with Polish leading the top of the pessimistic (79%), followed by Romanians (75%).
The study also shows significant shifts in the perceived levels of uncertainty facing respondents’ businesses, considering that an average of 36% respondents felt a high level of external financial and economic uncertainty in the pre-outbreak edition of the survey, compared to almost 70%, in the latest edition.
In this context, the majority of CFOs across all industries think that conditions in 2020 and in the beginning of 2021 will not be favourable for taking more risk in financial decisions. Romanians are at the top of the risk-averse financial leaders, with 96% of respondents, followed by Estonians (94%) and Polish (92%).
When it comes to predictions about inflation, most of the respondents foresee growth in consumer price index in their countries, with the highest expected rates in Poland (5.2%) and in Romania (4.7%).
The most significant threat to business over the next year in CFOs view is the reduction in domestic and foreign demand, according to the survey. As a consequence, 62% of respondents expect their companies’ revenues will decrease.
When asked about the most appropriate ways to finance the business in the current context, CFOs see internal financing (51%) and bank borrowing (42%) as the most attractive sources of funding.