Sweden sees highest number of bankruptcy filings since 2013

This photo taken on Oct. 28, 2022 shows an empty premise in central Stockholm, Sweden. (Xinhua/He Miao)

STOCKHOLM, Jan. 2 (Xinhua) -- Due mainly to the ongoing Ukraine crisis, the accelerating rate of inflation and high electricity prices, the number of bankruptcies in Sweden rose to the highest level in a decade during the second half of 2022, according to statistics released on Monday.

Between July and December 2022, 22 percent more bankruptcies were registered than in the same period in 2021, business and credit reference agency UC said in a press release.

According to UC, nearly 3,500 companies filed for bankruptcy in the said period, around 300 more than in the same period in 2013, when the previous record was registered.

In December alone, UC said that the number of bankruptcies increased by 17 percent year-on-year.

Among hotels and restaurants, the number of bankruptcies was 29 percent higher in December than in the same month in 2021. The respective increase among retailers was 28 percent, UC said.

Meanwhile, the total number of start-ups across all sectors decreased by 13 percent in December compared with the same month in 2021, UC said.

This photo taken on Oct. 28, 2022 shows an empty premise in central Stockholm, Sweden. (Xinhua/He Miao)

As Sweden eased the COVID-19 pandemic-related restrictions, 2021 saw the lowest number of bankruptcies on record. The year 2022 also started on a high note, but concluded with unpleasant surprises, UC economist Johanna Blome said in the press release.

"Ahead of 2022, optimism was high, not least as a result of the record low number of bankruptcies in the past year and the removal of pandemic restrictions. A bright future was predicted for Sweden's entrepreneurs and small business owners, but unfortunately, the year (2022) instead offered a series of unpleasant surprises that affected both the Swedish and the global economy," Blome said.

"Many companies face a tough 2023. Smaller companies can suffer from setbacks in liquidity as a result of increased electricity and purchase costs as well as interests," Blome said, adding, "The risk is great that bankruptcies will continue to increase and the number of start-ups will decrease -- at least during the first part of 2023."

In the week leading up to the 2022 year-end holidays, the Swedish government said that the country was entering a recession that was expected to last until 2025. The country's gross domestic product (GDP) is projected to shrink by 0.7 percent this year. Unemployment is expected to grow to 7.8 percent in 2023 and to 8.2 percent in 2024.