Insolvencies to rise in 4 out of 5 countries in 2020, says Euler Hermes

Euler Hermes, global leader in commercial credit insurance and a recognized specialist in collateral and debt collection, presents a Global Insolvency Index, which shows that insolvencies rise in 4 out of 5 countries in 2020.

Global bankruptcies are still on the rise, implying higher export risks: this is the conclusion of the latest Global Insolvency Report by Euler Hermes, which covers 44 countries and 87% of global GDP and provides the last update of its Global Insolvency Index. Business insolvencies increased by +9% in 2019, mainly due to a prolonged surge in China (+20%) and, to a lesser extent, a trend reversal in Western Europe (+2%) and North America (+3%).

The situation in Romania

“In Romania, we expect the downward slope of the insolvencies of the last two years (-21.5% in 2019 /-8.8% in 2018) to change its direction. The slowdown of economic growth in tandem with the one manifested at the global level and the increase of imbalances in the current account deficit and the budget deficit are reasons of concern at the macroeconomic level,” says Mihai Alexandru Chipirliu, Head of Risk Analysis, Euler Hermes Romania.

“Also, at the microeconomic level, we find an increase in the number of non-payment incidents when settling payment instruments. This should be corroborated by an increase in the terms of collection reported or confirmed by companies in various sectors, especially in the pharmaceutical sector, distribution mainly non-food, construction and related sectors – metals, building materials, agriculture,” he adds.