Euler Hermes predicts an increase in business insolvencies in 2022

euler hermesAccording to a report by Euler Hermes, the number of business insolvencies should increase in 2022. The credit insurer expects the overall insolvency rate to rise by around 15%.

On a global scale, a downward trend in the number of failures has been recorded for the years 2020 (-12%) and 2021 (-6%). This is the outcome of the support schemes implemented by the states to assist companies during the health crisis.

In the United States, public support and the economic recovery following the health crisis should help keep business insolvencies at a low level. The expected trend for 2022 is +5%.

In Western Europe, the rate of business failures is expected to rise to 16% (17% in the Eurozone). In Central and Eastern Europe, it will increase to +13%. The impact of the crisis will be very different from one country to another. It will depend on the most affected economic activities.

In Asia Pacific, the insolvency rate has declined by 15% in 2020. Forecasts for 2021 call for an increase in failures of around 8%. This trend is expected to last in 2022 with +18%, a ratio very close to 2019's +19%.

According to the same study, insolvencies in Africa are expected to increase by 1% in 2022. The impact of the health crisis has already been noted in 2021 (+37%). The high failure rate is explained by the limited aid received by investors.

In Latin America, the insolvency rate is expected to rise by 9% in 2022.

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