insolvencies-rise

After two years of decline, insolvencies worldwide will rise again in 2022 (+15%)

After two years of decline, insolvencies worldwide will increase by 15% in 2022. Due to the numerous government support measures, Euler Hermes expects a more moderate increase of 10% for Belgium. This is the result of the latest study by Euler Hermes, global leader in Trade Credit Insurance and part of Allianz.

For Belgium, Euler Hermes forecasts a slight increase of 3% in the number of insolvencies in 2021 (7,400 in total) and an increase of 10% in 2022 (8,150 bankruptcies). Nevertheless, these figures remain well below the pre-crisis record levels (over 10,000 bankruptcies in 2019).

In terms of sectors, Euler Hermes expects that Benelux wholesalers will face more difficult times. With the current rise in energy prices, the energy sector is also at risk. In addition, the trade credit insurer mentions as risk factors the disruption of supply chains, whether or not inflation will continue to rise and the shortage of personnel. "The question is to what extent companies are able to pass on rising costs to their customers. In many sectors, this is not competitively possible.”

In addition, Euler Hermes points to the risks associated with zombie companies: "For years we have seen this trend: unhealthy companies are kept alive by 'free' money via extremely low interest rates and central bank purchase programs. Added to this is the massive state support for the coronavirus. Now that this support is going to disappear, some of these zombie companies will go bankrupt.”

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