Bankruptcies in Sweden hit decade-high

During the first six months of this year, a total of 3,949 companies went bankrupt in Sweden, the highest in a decade, state media reported.

According to the Swedish Television (SVT) report, more than 28,000 jobs were lost due to bankruptcies in the period.

Business and credit reference agency UC said that hotels and restaurants were the most affected sectors, especially in May and June when the number of bankruptcies was 90 per cent higher than in the same months in 2022, Xinhua news agency reported.

As the hotel and restaurant industry is a staff-intensive industry, this caused a vicious circle of more bankruptcies, increased unemployment, and reduced consumption, said Johanna Blome, an economist at UC.

Although the hospitality industry was the hardest hit, the number of bankruptcies increased across all major industries, and by 83 per cent in those worst-affected during the first six months compared with the same period last year.

In the capital region, the number of bankruptcies was up 23 per cent compared with the first six months of 2022, UC said.

The main reason behind rising bankruptcies was increasing costs due to inflation, Blome said.

According to the latest figures released by Statistics Sweden on July 14, inflation stood at 9.3 per cent year-on-year in June.

Meanwhile, Ingela Gullstrand, a business advisor in the Ostergotland region, told SVT that businesses had to deal with another cost besides inflation which they did not face last year:

"Many companies received tax deferrals during the (Covid-19) pandemic and those taxes must now be paid, so it is some sort of a delayed effect of the pandemic," Gullstrand said.