Sweden has the highest number of bankruptcy filings since 2013
Sweden has the highest number of bankruptcy filings since 2013
Due mainly to the ongoing war between Russia and Ukraine, the accelerating rate of inflation and high electricity prices, the number of bankruptcies in Sweden rose to the highest level in a decade in the second half of 2022, according to the latest statistics.
Stockholm: Due mainly to the ongoing war between Russia and Ukraine, the accelerating rate of inflation and high electricity prices, the number of bankruptcies in Sweden rose to the highest level in a decade in the second half of 2022, according to the latest statistics.
Between July and December 2022, 22 percent more bankruptcies were registered than in the same period in 2021, Xinhua news agency reported, citing a press release from business and credit reference agency UC.
According to UC, nearly 3,500 companies have filed for bankruptcy during the mentioned period, approximately 300 more than during the same period in 2013, when the previous record was registered.
In December alone, UC said the number of bankruptcies increased by 17 percent year-on-year.
Among hotels and restaurants, the number of bankruptcies was 29 percent more in December than the same month in 2021. The corresponding increase among retailers was 28 percent, UC said.
Meanwhile, the total number of start-ups across all sectors fell 13 percent in December compared to the same month in 2021, UC said.
When Sweden eased the covid-19 pandemic-related restrictions, 2021 saw the lowest number of bankruptcies ever. The year 2022 also started at high speed, but ended with unpleasant surprises, says UC economist Johanna Blome in the press release.
“Ahead of 2022, optimism was high, not least as a result of the record low number of bankruptcies in the past year and the removal of pandemic restrictions. A bright future was predicted for Sweden’s entrepreneurs and small business owners, but unfortunately the year (2022) instead offered a series of unpleasant surprises that affected both the Swedish and the global economy, says Blome.
“Many companies face a tough 2023. Smaller companies may suffer liquidity setbacks due to increased electricity and purchasing costs as well as interest rates,” Blome said, adding: “The risk is high that bankruptcies will continue to increase and the number of start-ups will decrease — at least in the first part of 2023.”
In the week leading up to the 2022 end-of-year holidays, the Swedish government said the country was entering a recession expected to last until 2025. The country’s gross domestic product (GDP) is expected to shrink by 0.7 percent in 2023 Unemployment is expected to grow to 7.8 percent 2023 and to 8.2 percent in 2024.