Global insolvencies expected to rise by 19pc in 2023

Inflationary pressures, monetary tightening, the global energy crisis and supply chain disruptions are jeopardising cash flows. And after two years of decline, Allianz Trade expects a broad-based acceleration in global business insolvencies.

It says global business insolvencies could rise both in 2022 (+10%) and 2023 (+19%). Two significant rebounds, occurring after two years of decline, may bring global insolvencies back above their pre-pandemic levels in 2023 (by +2%).

“The rebound in business insolvencies is already a reality for most countries, in particular for the top European markets (the UK, France, Spain, the Netherlands, Belgium and Switzerland), which explain two-thirds of the rise,” said Maxime Lemerle, lead analyst for Insolvency Research at Allianz Trade. “At a global level, half of the countries we analyse have recorded double-digit increases in business insolvencies in the first half of 2022. However, the US, China, Germany, Italy and Brazil are still registering prolonged low levels of insolvencies, but the trend should reverse next year.”

Europe may be particularly impacted by the surge in insolvencies over the next two years.
Allianz Trade anticipates rises in France (+46% in 2022 ; +29% in 2023), the UK (+51% ; +10%), Germany (+5% ; +17%) and Italy (-6% ; +36%). The region should exceed its pre-pandemic level of business insolvencies as soon as 2022 (by +5%).

In Asia, China is expected to register +15% more insolvencies in 2023 on the back of low growth and limited impact from the monetary and fiscal easing.

In the US, Allianz Trade expects an increase of +38% in business insolvencies in 2023 as a result of tighter monetary and financial conditions.

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