Sweden's Economic Downturn: A Surge in Bankruptcies Marks the Worst Month in Decades

Written by Henrik Rothen

Mar.03 - 2024 3:00 PM CET

Photo: Shutterstock.com
Photo: Shutterstock.com
A Surge in Bankruptcies Marks the Worst Month in Decades.

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February witnessed a dramatic increase in bankruptcies across Sweden, marking a 62% rise and heralding the most challenging period since the early 1990s financial crisis.

This surge represents the highest February figure in two decades, shedding light on the profound economic challenges facing the nation, as reported by Bloomberg and highlighted by Ziarul Financiar.

The data, provided by the collection agency Creditsafe, reveals a significant strain across various sectors, notably impacting hotels, restaurants, consulting, construction, and automobile dealerships.

Unexpected Economic Contraction

Recent revelations underscore the unexpected contraction of Sweden's economy in the last quarter of the previous year, contrary to predictions that had suggested the country might avoid a recession.

The seasonally adjusted gross domestic product (GDP) experienced a slight decline of 0.1% in the three months leading up to December, compared to the quarter before, indicating a downturn that caught analysts and stakeholders by surprise.

A Protracted Economic Struggle

Sweden finds itself amidst a prolonged economic struggle, with bankruptcies increasing for 19 consecutive months. Henrik Jacobsson, CEO of Creditsafe, described the situation as Sweden being "right in the eye of the storm," highlighting the severity of the economic downturn the country is enduring.

The numbers are stark: 908 companies declared bankruptcy in February alone, a significant jump from the 559 reported a year earlier and nearly double the 454 bankruptcies recorded in February 2022.

Sector-Specific Impact

The detailed data points to acute distress in several key sectors of the economy. The hospitality industry, alongside restaurants, has been particularly hard hit, reflecting changes in consumer behavior and the broader economic malaise. Consulting firms, construction companies, and car dealerships are also facing severe challenges, pointing to a widespread economic slowdown that transcends individual sectors.

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