Corporate bankruptcies fell in 2020 in major economies despite pandemic

27 May 2021

The number of corporate bankruptcies in the vast majority of the world's largest economies fell in 2020, according to data from the information company Dun & Bradstreet.

The number of corporate bankruptcies in the vast majority of the world's largest economies fell in 2020, according to data from the information company Dun & Bradstreet.

Although revenues and profits of companies, especially in small businesses, fell sharply last year due to the effects of the pandemic, the suspension of the work of courts, the freezing of activities of entire sectors of the economy, extensive government support measures have prevented or delayed many bankruptcies. In a number of cases, the initiation of bankruptcy proceedings against debtors turned out to be simply pointless, since - given the unusual circumstances, the impossibility of realizing collateral and other assets - there was little that lenders could do about insolvent hotels, cruise companies, cinemas or restaurants.

For 36 countries for which complete data for three quarters of 2020 are available, the decline for this period was 14.7%. In particular, in the USA, following the results of 3 quarters, bankruptcies decreased by 11.9%, in Germany - 13.1%. At the same time, only in Portugal, Bulgaria, Poland, Czech Republic, Sweden, as well as in Taiwan and Hong Kong, bankruptcies showed an increase in comparison with the previous year. This, experts point out, are territories and states that, for the most part, were not among the most affected by the pandemic and where quarantine restrictions were generally softer.

Experts point to the risk of an increase in the number of bankruptcies in 2021, especially in the service sector.