October 18 (SeeNews) - The insolvencies of Bulgarian companies will increase by 9% year-on-year in 2022, France-based credit insurance company Euler Hermes said on Monday.
The increase will come because coronavirus-related state support measures have kept the number of insolvencies low during the Covid-19 crisis, Euler Hermes said in an e-mailed statement.
Euler Hermes estimates that massive government intervention in the context of the coronavirus pandemic prevented one in two bankruptcies in Western Europe in 2020. The credit insurer reports a 12% drop in the number of insolvencies on a global scale, while its forecast for 2021 is for a decrease of 6%.
In Bulgaria, however, the trend is the opposite - Euler Hermes indicates a 4% increase in insolvencies last year and expects an increase of 5% this year.
An upward trend is already reported in other countries in Central and Eastern Europe, as well as in emerging economies around the world, where opportunities for state support are more limited.
"For the first three quarters of 2021 compared to the same period of last year we are already seeing a 3% growth of insolvencies in the country. This is much lower than we expected a year ago due to the business support measures that were taken in the context of the pandemic, as well as to the accelerated recovery of the global economy," Kamelia Popova, manager for Bulgaria at Euler Hermes, said in the statement.
At the moment it is difficult to predict how this trend will progress because it depends to a large extent on how long and what measures in support of businesses and the economy will Bulgaria continue to implement. "In any case, however, there will be an increase and companies need to be careful in risk assessment of transactions with partners in the country and abroad," Popova said.