Illustration photo: Bloomberg Creative Photos
The Financial Times on December 19, citing data from national statistical offices, reported that the world’s corporate sector has been affected by a wave of bankruptcies, which has occurred at an unprecedented double-digit rate. over the past several decades.
Corporate insolvency in the US increased 30% year-on-year in the 12 months to September. While in Germany, the largest economy in the European Union (EU), the number of bankruptcies Production increased by 25% from January to September compared to the same period last year.
Across the EU, the number of companies going bankrupt rose 13% in the nine months to September compared with the same period last year, reaching an eight-year high.
In October, France, the Netherlands and Japan saw bankruptcies increase by more than 30% compared to the same period last year. With the majority of its members being wealthy countries, the Organization for Economic Cooperation and Development (OECD) also recently reported that in several member countries, including Nordic countries such as Denmark and Switzerland, In Sweden and Finland, bankruptcy rates have exceeded levels that occurred during the 2008 global financial crisis.
England and Wales also saw their highest defaults since 2009 between January and September this year.
Neil Shearing, chief economist at Capital Economics, told the Financial Times that the trend was largely due to higher interest rates and so-called “zombie” companies. These companies have overcome difficult times due to COVID-19 only thanks to government support.
Many major government support programs for companies and households during the pandemic have been largely canceled, while central banks have continuously raised interest rates in an effort to curb flaring inflation. increase.
According to experts, the trend of mass bankruptcy will continue because many businesses have to refinance debt at higher interest rates in the coming months, despite the possibility of raising interest rates by central banks that are forecast to increase. to the climax.
