Euler Hermes are predicting a further rise of +6% in global insolvencies for 2020 with business failures rising for the fourth consecutive year.
The combination of the low pace of economic momentum, mainly in advanced economies and in the industrial sector, and the lagging effects of trade disputes, political uncertainties and social tensions, will keep companies under pressure.
While the easing of global monetary and financial conditions will help, increased price competition and higher salaries will limit profit margins adding additional pressure to a higher number of companies in most regions.
Asia will see the most rise in insolvencies at +8% year on year, with China at +10% and India at +11%. Western Europe, where economic growth will remain below the historical threshold which usually stabilises the number of insolvencies (+1.7%), will see an increase in most countries, but this will be more moderate, with Germany at +3%, Italy at +4% and Spain +5%, with the UK projected at +3%.
80% of countries will see an increase in insolvencies in 2020, with Brazil (-3% y/y) and France (0%) the exceptions. Notably half of all countries will register more insolvencies in 2020 than before the financial crisis.
Sterling Debt Recovery collect debt throughout the world on a commission only basis. We help our clients to collect often when all else has failed, however it’s important to note that the older a debt is, the less likely it will be paid. If you’re struggling to collect a debt contact Sterling for advice and to find out how we can help.