Corporate bankruptcies in most advanced economies are rising at rapid rates as borrowing costs grow and pandemic-era aid is eliminated Read Full Article at RT.com
Soaring interest rates and the end of Covid subsidies have had a big impact on businesses, the outlet reports
The world’s corporate sector has been hit by a wave of bankruptcies occurring at a double-digit pace unseen in decades, the Financial Times reported on Monday, citing data from national statistics offices.
Business insolvencies in the US saw a year-on-year surge of 30% in the 12 months through September, while in Germany, the EU’s biggest economy, the number of reported bankruptcies increased by 25% from January to September compared to the same period a year ago.
Across the EU, the number of companies going bust grew 13% in the nine months to September year-over-year, hitting an eight-year high.
In October, France, the Netherlands and Japan saw the number of bankruptcies rising by more than 30% versus the same month a year ago. The OECD group of mostly wealthy states has recently reported that in some member states, including Nordic nations Denmark, Sweden and Finland, bankruptcy rates have exceeded levels reached during the 2008 global financial crisis.
England and Wales also saw insolvencies reaching their highest level since 2009 in between January and September of the current year.
The trend has been strongly fueled by higher key rates, as well as self-liquidation of the so-called zombie firms, which had pulled through the Covid era only thanks to government support, Neil Shearing, chief economist at Capital Economics, told the FT.
Massive government support schemes for companies and households during the pandemic have been largely withdrawn now, while central banks have been repeatedly hiking the interest rates in an attempt to tame spiraling inflation.
According to the expert, the trend is expected to continue as many businesses will have to refinance debt at higher rates in the coming months, even if central banks’ rate rises are forecast to have peaked.
Find more stories on economy and finance in TROIB business
TroibNews 
