The latest data compiled by credit counseling firm UC points to a troubling trend: In December alone, the number of bankruptcies rose 23% compared to the previous year. The continued rise can be attributed to the impact of inflation and rising interest rates on companies.
According to Gabriela Göransson, CEO of the University of California, the trend of stabilization of bankruptcies previously observed in the fall has reversed, indicating an acceleration of the economic downturn. Despite the central bank's efforts to limit interest rate rises, Sweden is expected to experience a recession this year. The University of California warns that previously resilient companies are now struggling to maintain stable turnover and liquidity, which could lead to a new wave of bankruptcies.
Meanwhile, the number of startups in Sweden has fallen to its lowest levels in more than a decade in key industries including construction, retail and hospitality.
Although the number of current bankruptcies has not yet exceeded the number of bankruptcies in the 1990s, the global nature of today's markets and the broad impact of the crisis characterize the current economic challenges. According to the Swedish National Institute for Economic Research, financing conditions may improve over the summer with the expected interest rate cut from the Riksbank.
Cover image source: Getty Images
