Num­ber of bank­rupt­cies down in Latvia and Es­to­nia but up in Lithua­nia

Baltic News Network - - News -

Last year, the num­ber of bank­rupt­cies de­clined 12.4% in Latvia and 10.9% in Es­to­nia. Lithua­nia, on the other hand, had ex­pe­ri­enced a 35.2% in­crease in the num­ber of bank­rupt com­pa­nies, ac­cord­ing to in­for­ma­tion com­piled by Co­face.

The num­ber of in­sol­vent com­pa­nies in Cen­tral and East­ern Euro­pean re­gion had de­clined 6% last year. Re­gion’s growth ben­e­fited from favourable macroe­co­nomic en­vi­ron­ment, which was largely thanks to the pos­i­tive sit­u­a­tion on the labour mar­ket with low un­em­ploy­ment in­dexes and high wage rise.

The num­ber of bank­rupt­cies had more than dou­bled in Hun­gary last year (+56.9%), which was the big­gest in­crease in bank­ruptcy num­bers in the re­gion. In Lithua­nia, the num­ber of bank­rupt­cies was af­fected by the State Tax In­spec­torate’s and So­cial Fund’s ‘clean­ing’ process, which cleared the mar­ket of com­pa­nies that were sol­vent for a long time. The largest de­cline of bank­rupt­cies was reg­is­tered in Bul­garia (-35.6%).

In re­la­tion to spe­cific in­dus­tries, the sit­u­a­tion seems com­pli­cated the most for the con­struc­tion sec­tor. In Es­to­nia, Rus­sia and Hun­gary, bank­rupt­cies of con­struc­tion com­pa­nies forms more than 20% of the to­tal num­ber of in­sol­vency cases.

«It is ex­pected that the to­tal num­ber of bank­rupt­cies in the re­gion will start de­clin­ing this year and will con­tinue de­clin­ing next year. GDP growth and re­cov­ery of in­vest­ments is a pos­i­tive sig­nal for com­pa­nies. New in­fra­struc­ture projects, sta­ble house­hold con­sump­tion rise and de­vel­op­ment of for­eign mar­kets will serve as good sup­port for the re­gion’s eco­nomic growth. At the same time, it is worth men­tion­ing that bank­ruptcy statis­tics do not al­ways re­flect the ac­tual sit­u­a­tion. Be­cause of that, each busi­ness should an­a­lyse pay­ment dis­ci­pline in­de­pen­dently,» says Co­face Baltics di­rec­tor Mantvy­das Štareika.


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