The number of insolvencies in Sweden has increased as consumption declines, the outlet reports
Bankruptcies in Sweden soared for a seventh straight month in February, amid falling household consumption and growing pressure on construction companies from an ongoing crisis in the housing market, Bloomberg reported this week.
A sharp slump in Sweden’s real estate sector has hurt the Nordic region’s largest economy, which is struggling with rising consumer prices and rising interest rates. The country has faced its worst housing price decline in three decades, which has led to reduced investment in new homes.
The situation has contributed to an increase in the number of defaults in the country. According to the media, citing the credit bureau UC, the number of bankruptcy filings in February increased by 11% year-on-year. Retail trade and the motor vehicle industry were hit the hardest last month.
“The number of bankruptcies is still at a high level and has increased compared to last year.” UC economist Johanna Blome said in a statement, adding that there is little optimism ahead as more rate hikes are expected while inflation is not abating.
READ MORE: EU reports wave of bankruptcies
In February, the biggest Swedish company to go bankrupt was airline Air Leap, with annual sales of 278 million kroner ($27 million), Bloomberg said, citing Creditsafe.
The Swedish government announced at the end of 2022 that the country was entering a recession that would last until 2025.
The development reflects an EU-wide trend as the bloc teeters on the brink of recession. In February, the statistics agency Eurostat reported a wave of bankruptcies among EU companies, which rose to the highest level in the fourth quarter of 2022 since registrations began in 2015.
Defaults rose by 26.8% compared to the previous three months, Eurostat said, noting that “Bankruptcy filings increased in all four quarters of 2022.”
The accommodation and food industry was hardest hit in the last three months of 2022 compared to the same period in 2019, with a 97.7% increase in insolvencies among EU companies.
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