Drastic increase in bankruptcies could hit industries: ABN AMRO

Experts at ABN AMRO predict that bankruptcies will escalate this year and the next due to soaring energy prices and the phasing out of government aid, according to a report by the bank. The most bankruptcies are expected to occur in the transport and logistics sector.

Government support for businesses during the coronavirus pandemic and multiple lockdowns is set to expire on April 1. The government has deemed the aid schemes no longer necessary now that most coronavirus-related restrictions on society have been lifted. ABN AMRO expects a withdrawal in wage-support measures to increase bankruptcies, driving more people into the labor market.

Experts at the bank suspect there will be fewer bankruptcies in the catering industry, since it has mostly reopened and is experiencing staff shortages. The catering industry was especially hard hit judging by the number of applications for NOW, a program compensating companies’ wage costs, with more than half of all applications for the scheme coming from that industry.

Russia’s invasion of Ukraine has also driven up gas prices. Companies that are significantly involved with energy could be driven to bankruptcy: experts predict an increase by 50 percent of bankruptcies in 2022 and 68 percent in 2023.