https://sputnikglobe.com/20221206/denmark-braced-for-record-number-of-bankruptcies-as-inflation-and-energy-crisis-bite-1105083668.html
Denmark Braced for Record Number of Bankruptcies As Inflation and Energy Crisis Bite
Denmark Braced for Record Number of Bankruptcies As Inflation and Energy Crisis Bite
Sputnik International
Industry professionals have predicted that there will be a growing number of bankruptcies in the next few months as unemployment rises and businesses seek new... 06.12.2022, Sputnik International
2022-12-06T07:06+0000
2022-12-06T07:06+0000
2022-12-06T08:22+0000
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A total of 331 companies filed for bankruptcy in Denmark in November, the highest number in 13 years, according to a new report published by SMVdanmark, the country’s main business organization that represents small and medium-sized enterprises. Since the summer, businesses have been “hit hard by high inflation, soaring energy bills and, not least, fears about the future of the economy, which have sent consumers' appetite for buying into a tailspin,” SMVdanmark, which represents 18,000 businesses throughout the country, said.The report stressed that many businesses were already struggling with a backlog from the COVID-19 pandemic even before the energy crisis came home to roost.Although the wave of bankruptcies has affected all types of business, construction and retail have been particularly hard hit. More than half the bankruptcies in November were in the construction sector. And even though the number of firms going to the wall has hit a decade-high, specialists expect more to come.“Unfortunately we will see even more bankruptcies in the months ahead,” Lundqvist warned. He envisaged “rising unemployment” and “sad pedestrian streets” as many shops will have to close down.When asked what they expected for the future, six out of seven of Denmark’s largest banks said they foresaw more business customers seeking help in the form of new loans during winter. Furthermore, a large number of Danish companies are still repaying their COVID-19 loans and their business conditions have severely deteriorated because of the energy crisis.According to Statistics Denmark, consumer prices have been rising at the steepest rate since November 1982, with inflation reaching 10.1 percent in October. Higher prices for electricity, food, gas and fuel were named as the main factors of the high overall inflation.Economists called it “terrible” news, as the sharp increases are gnawing away at households’ budgets and sinking Danes’ purchasing power, resulting in a vicious circle for the economy.Despite being celebrated as the poster child of green energy, where renewables, and above all wind power, account for nearly half of overall energy consumption, Denmark has also been hit by the crisis that engulfed Europe as a result of Brussels’ ill-conceived decision to cut energy imports from Russia as “punishment” for its special operation in Ukraine.As with many other countries throughout the continent, Denmark saw a massive price hike earlier this year and took steps such as turning down the heating in public buildings throughout the country. Danes have been encouraged to save energy by the authorities by reining in the heating, limiting the use of hot water and switching off unnecessary lighting and appliances.
https://sputnikglobe.com/20221011/denmark-norway-see-record-double-digit-inflation-1101703596.html
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soaring bankruptcies, struggling businesses, high inflation, energy crisis, danish economy
soaring bankruptcies, struggling businesses, high inflation, energy crisis, danish economy
Denmark Braced for Record Number of Bankruptcies As Inflation and Energy Crisis Bite
07:06 GMT 06.12.2022 (Updated: 08:22 GMT 06.12.2022) Industry professionals have predicted that there will be a growing number of bankruptcies in the next few months as unemployment rises and businesses seek new loans to stay afloat. Many Danish companies are still repaying their COVID-19 loans, and the trading environment has crumbled.
A total of 331 companies filed for bankruptcy in Denmark in November, the highest number in 13 years, according to a new report published by SMVdanmark, the country’s main business organization that represents small and medium-sized enterprises.
Since the summer, businesses have been “hit hard by high inflation, soaring energy bills and, not least, fears about the future of the economy, which have sent consumers' appetite for buying into a tailspin,” SMVdanmark, which represents 18,000 businesses throughout the country, said.
The report stressed that many businesses were already struggling with a backlog from the COVID-19 pandemic even before the energy crisis came home to roost.
“Never in the history of statistics have we seen so many bankruptcies among businesses with employees. This means that the crisis is hitting real businesses with turnover and employees,” SMVdanmark analyst Lasse Lundqvist said in a statement.
Although the wave of bankruptcies has affected all types of business, construction and retail have been particularly hard hit. More than half the bankruptcies in November were in the construction sector. And even though the number of firms going to the wall has hit a decade-high, specialists expect more to come.
“Unfortunately we will see even more bankruptcies in the months ahead,” Lundqvist warned. He envisaged “rising unemployment” and “sad pedestrian streets” as many shops will have to close down.
When asked what they expected for the future, six out of seven of Denmark’s largest banks said they foresaw more business customers seeking help in the form of new loans during winter. Furthermore, a large number of Danish companies are still repaying their COVID-19 loans and their business conditions have severely deteriorated because of the energy crisis.
According to Statistics Denmark, consumer prices have been rising at the steepest rate since November 1982, with inflation reaching 10.1 percent in October. Higher prices for electricity, food, gas and fuel were named as the main factors of the high overall inflation.
Economists called it “terrible” news, as the sharp increases are gnawing away at households’ budgets and sinking Danes’ purchasing power, resulting in a vicious circle for the economy.
11 October 2022, 05:25 GMT
Despite being celebrated as the poster child of green energy, where renewables, and above all wind power, account for nearly half of overall energy consumption, Denmark has also been hit by the crisis that engulfed Europe as a result of Brussels’ ill-conceived decision to cut energy imports from Russia as “punishment” for its special operation in Ukraine.
As with many other countries throughout the continent, Denmark saw a massive price hike earlier this year and took steps such as turning down the heating in public buildings throughout the country. Danes have been encouraged to save energy by the authorities by reining in the heating, limiting the use of hot water and switching off unnecessary lighting and appliances.
