Bankruptcies in Sweden extended their streak of annual increases to 21 months in April, according to Creditsafe, which does not expect immediate relief even as inflation slows and rate cuts loom.
The number of bankruptcies in April was 72% higher than a year ago, the credit reporting agency said in a statement. Growth came from e-commerce, real estate, hotels and restaurants. Last month, 942 companies went bankrupt, the highest number for April since 1994.
“Although we are starting to get used to this grim trend of rising bankruptcies, the strong percentage increase over the last six months is simply astonishing,” said Henrik Jakobsson, chief executive of Creditsafe’s Swedish unit, adding that the growth is likely to continue into next year. the coming months.
Rising prices and higher borrowing costs have proven particularly difficult for construction and commercial real estate companies, while restaurants and retailers also saw weaker demand as households reined in spending. In the first four months of the year, bankruptcies in the construction industry rose 63%, and defaults among restaurants and hotels rose 80%.
Following a string of inflation readings that showed prices rising moderately, the country’s central bank is expected to cut its benchmark rate either next week or in June, launching an easing campaign that could bring some relief to struggling companies.
“While there are positive signs such as slowing inflation and the possibility of future rate cuts, it will take time before this has a noticeable impact on companies’ financial performance,” Jacobsson said.