Departing expat: Romanian crisis has been going on for longer than anyone had expected

At the end of his term on the Romanian market, Alexander Frech, the German who coordinated DIY chain BauMax over the last two years, a 110 million-euro business with 900 employees, says there are so many factors that inhibit consumption that people are surprised purchases are still made.
A few days before going back to the company’s headquarters in Austria, Frech told ZF in an interview that the local market was in a crisis that had been going on for longer than anyone had expected.
“The toughest part of the crisis is over, but what we have before us now is a new reality of the Romanian market, with a declining consumption, a political and economic crisis, exchange rate fluctuations. Consumption has been hit hard by the VAT hike to 24%, by the salary cuts, unemployment and inflation; there are so many factors inhibiting consumption that people are surprised things are still selling,” Alexander Frech said.
The decline of local trade and of the construction sector continued to drag the economy down in the first half of the year, according to the latest statistics from the National Statistics Institute. In DIYretail, player estimates indicated a 10-15% decline in demand in the first half against the similar period of 2009.