After two years of decline, a broad-based acceleration in global business insolvencies is expected. According to Allianz Trade, global business insolvencies should rise both in 2022 (+10%) and 2023 (+19%).
Allianz Trade in its latest report Corporate risk is back: Watch out for business insolvencies said that two significant rebounds, occurring after two years of decline, may bring global insolvencies back above their pre-pandemic levels in 2023 (by +2%).
Allianz Trade lead analyst for insolvency research Maxime Lemerle said, “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.”
China is expected to keep its annual level of insolvencies under control in 2022, thanks to a low starting point and despite increased difficulties for companies most exposed to international trade and COVID-19-related restrictions, notably in the construction sector.
The report said it expects China to register +15% more insolvencies in 2023 on the back of low growth and limited impact from the monetary and fiscal easing. However, the other economies in the region should see more insolvencies due to the deterioration of the regional and global environment, most often from a low (Australia, Taiwan) or very low level (Japan, South Korea, Hong Kong, New Zealand).
India will stand out as it is expected to experience a strong catch-up from the long suspension of courts. Overall, Asia and North America will be the only two regions not back to 2019 levels in insolvencies by 2023, despite seeing an increase in 2023. M