https://sputnikglobe.com/20230413/danish-bankruptcies-soar-to-highs-not-seen-since-last-financial-crisis-1109457918.html
Danish Bankruptcies Soar to Highs Not Seen Since Last Financial Crisis
Danish Bankruptcies Soar to Highs Not Seen Since Last Financial Crisis
Sputnik International
The wave of Danish bankruptcies has been attributed to late effects of COVID lockdowns, as well as interest rate increases and ailing private consumption.
2023-04-13T06:35+0000
2023-04-13T06:35+0000
2023-04-13T08:24+0000
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The number of bankruptcies in Denmark has reached a record high unseen since the wake of the 2008 financial crisis.During the first three months of 2023, 837 companies filed for bankruptcy in the Nordic country, marking a 40-percent increase on the previous year, Statistics Denmark said.The bankruptcies in March alone cost the nation 2,222 full-time positions – 50 percent more than in February.The Danish Chamber of Commerce noted that transport businesses, restaurants and construction firms have been particularly hard hit. A large share of restaurants threw in the towel because of lockdowns and COVID closures when customers could not sit inside and businesses had to rely on catering and deliveries, it said.Local experts offered two major explanations for the wave of companies going out of business.The Chamber of Commerce warned it expected the number of bankruptcies to increase further in the coming months, seeing no reason for a letup or improvement.A similar take was shared by Palle Sorensen of Nykredit, who warned of "challenges lurking below the surface" and cited interest rate increases and ailing private consumption as reasons to be worried.A recent report by Denmark's National Bank envisaged a slowdown for the Danish economy, also citing interest rate increases having an impact on consumption. The tighter monetary policy is already damping activity in Denmark and is expected to quell both growth and inflation over the year ahead, the report said.
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danish economy, denmark economy, financial crisis, interest rate increases, ailing private consumption, economic slowdown
danish economy, denmark economy, financial crisis, interest rate increases, ailing private consumption, economic slowdown
Danish Bankruptcies Soar to Highs Not Seen Since Last Financial Crisis
06:35 GMT 13.04.2023 (Updated: 08:24 GMT 13.04.2023) The wave of Danish bankruptcies has been attributed to the late effects of COVID lockdowns, as well as interest rate rises and ailing private consumption.
The number of bankruptcies in Denmark has reached a record high unseen since the wake of the 2008 financial crisis.
During the first three months of 2023, 837 companies filed for bankruptcy in the Nordic country, marking a 40-percent increase on the previous year, Statistics Denmark said.
The bankruptcies in March alone cost the nation 2,222 full-time positions – 50 percent more than in February.
The Danish Chamber of Commerce noted that transport businesses, restaurants and construction firms have been particularly hard hit. A large share of restaurants threw in the towel because of lockdowns and
COVID closures when customers could not sit inside and businesses had to rely on catering and deliveries, it said.
Local experts offered two major explanations for the wave of companies going out of business.
"[The data] reflects a certain backlog of aid packages and government loans during the pandemic, which kept alive unprofitable companies that should have collapsed. Also parts of the economy are experiencing declining demand," Palle Sorensen, chief economist at Nykredit, the country's largest lender, told Danish media.
The Chamber of Commerce warned it expected the number of bankruptcies to
increase further in the coming months, seeing no reason for a letup or improvement.
"The higher production costs and the weaker demand will cause more companies to go bankrupt during the next six months," its senior economist Kristian Skriver said in a statement.
A similar take was shared by Palle Sorensen of Nykredit, who warned of "challenges lurking below the surface" and cited interest rate increases and ailing private consumption as reasons to be worried.
A recent report by Denmark's National Bank envisaged a slowdown for the Danish economy, also citing interest rate increases having an impact on consumption. The tighter monetary policy is already damping activity in Denmark and is expected to quell both growth and inflation over the year ahead, the report said.
