MADRID, 10 Oct. (EUROPA PRESS) –
Bankruptcies of companies in Spain will increase by 26% by the end of 2022 compared to 2019, while worldwide they will increase on average by 33%, according to a report on insolvencies prepared by Crédito y Caución.
Specifically, it expects the so-called ‘zombie’ companies, those that are financially weak, to materialize their bankruptcies in the four quarters after the end of the fiscal stimulus.
In this sense, the company points out that the withdrawal of public support to the economy has already occurred in some markets such as Brazil, Turkey or Russia, while in others, such as Australia, Ireland, Sweden, Japan or Spain, the stimuli until the fourth quarter of 2021. Even in the case of South Korea, the supports will extend until the second quarter of 2022.
In this way, the company specialized in credit insurance estimates that by the end of 2022 bankruptcies will have increased in most markets compared to pre-pandemic levels.
This increase will be especially notable in Italy (34%), the United Kingdom (33%), Australia (33%), Finland (29%), Singapore (28%), Spain (26%), the Netherlands (26%) and France (23%), while in Portugal, the increase will be 14%.
On the contrary, Sweden (3%), Japan (4%) or the United States (6%) will show a relatively stable evolution of insolvencies, while Brazil (-35%), South Korea (-15%) and Ireland (-10%) will be the only markets with substantially lower insolvencies in 2022 compared to 2019 levels.
DATA FOR 2020 AND 2021
Global insolvencies fell 14% in 2020 due to the collapse of the economy from the Covid-19 pandemic. With three months to go until the end of 2021, Crédito y Caución expects bankruptcies to decline by 1%, “a significant downward adjustment compared to our forecast for early 2021.”
By region, the company has seen an increase in bad debts in Europe in 2021, while the trend is down in North America and Asia-Pacific.
This fall is due, according to the report, to the changes that governments made in the laws on insolvencies in order to protect companies from bankruptcy, as well as to the fiscal support measures adopted to mitigate the effects on the economy of the Covid-19 pandemic.
The study indicates that these measures have been “effective” in containing a wave of insolvencies, although its forecasts point to the creation of ‘zombie’ companies that, once economic conditions return to normal, “may do not survive “, having a financial situation” too weak “.
Thus in 2022, it foresees that global insolvencies will increase by 33%, as fiscal support will be completely eliminated by then in most markets. This will cause a “return to normal” in the level of insolvency, together with the bankruptcies of a certain part of the companies that were “saved” from bankruptcy in 2020. As a result, the level of bad debts in all regions will increase.
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