A member state of the EU is experiencing an increase in the number of bankruptcy filings.
The number of bankruptcies in Sweden has been going up as consumer spending has been going down, the outlet says.
Bloomberg reported this week that the number of bankruptcies in Sweden went up for the seventh straight month in February. This was due to a drop in household spending and more pressure on construction companies from the tight housing market.
A big drop in Sweden’s real estate market has hurt the country’s economy, which is already struggling with rising prices and interest rates. The country is going through the worst drop in home prices in 30 years, which has made people less likely to invest in new homes.
Due to the situation, the number of defaults in the country has gone up. Credit reference agency UC told the news outlet that the number of bankruptcy filings in February was 11% higher than at the same time last year. Last month, the hardest-hit industries were retail and the car business.
“The number of bankruptcies is still high and has gone up since last year,” UC economist Johanna Blome said in a statement. She also said that there isn’t much hope for the future because more rate hikes are expected, and inflation isn’t slowing down.
Creditsafe told Bloomberg that Air Leap, a Swedish airline with annual sales of $27 million, was the biggest company to file for bankruptcy in February.
At the end of 2022, the Swedish government said that the country was going into a recession that would last until 2025.
This is part of a larger trend in the EU, which is on the verge of a recession. In February, the statistics agency Eurostat reported a wave of businesses going out of business in the EU. In the fourth quarter of 2022, the number of businesses going out of business reached its highest level since records began in 2015.
Eurostat said that the number of defaults went up by 26.8% compared to the previous three months and that the number of bankruptcy filings went up in all four quarters of 2022.
In the last three months of 2022, compared to the same time period in 2019, 97.7% more EU businesses went bankrupt in the lodging and food services industries.
