Insolvencies expected to grow by 16% in 2023

  • ECO News
  • 30 May 2022

In contrast to the declines seen in 2020 and 2021, the number of insolvencies in 2022 and 2023 is expected to grow by up to 16%, Cosec estimates.

The number of insolvencies is expected to rise over the next two years, anticipating a 16% increase in 2023, in contrast to the drops seen in 2020 and 2021, according to the Credit Insurance Company (Cosec). The end of support mechanisms for businesses, created by the Government to cushion the effects of the pandemic, are at the root of these figures.

Cosec estimates that the number of bankruptcies will increase by 2% in 2022 and 16% in 2023, contrasting with the falls seen in the previous two years: -2.3% in 2020 compared to 2019 and -12.3% in 2021 compared to 2020, the company said in a statement. The climate of economic uncertainty in Europe, rising production costs and high inflation are “additional challenges for companies”, thus justifying these figures.

In 2020, the and evolution of insolvencies should reflect different monthly rhythms: in the first half of the year the trend is stable and in the second half of the year the forecasts point to a marginal monthly growth of 7%.

“In the last two years, the pandemic has led the government to implement various mechanisms to support companies, which will have made it possible to limit the number of insolvencies,” says Maria Celeste Hagatong, president of the Cosec Board of Directors, quoted in a statement. “However, most of this aid ended at the end of 2021” and “the effects are already visible,” she adds, mentioning the 19% rise in Special Revitalisation Processes in 2022.