Bankruptcies in Netherlands could jump 77% next year

The number of bankruptcies in the Netherlands will increase sharply next year, according to credit insurer Atradius. The final effects of the government’s coronavirus support will have worn off. And that, combined with rising inflation, interest rates, and energy costs, will push many companies over the edge, Atradius expects, Het Financieele Dagblad reports.

The turning point will already be visible in the last four months of this year. Atradius expects the number of bankruptcies to be 9 percent higher in 2022 than in 2021. But the real catchup will happen next year when Atradius expects 77 percent more bankruptcies than this year.

According to Atradius, this is a catchup to the pandemic, when very few companies went bankrupt thanks to government support. The government already halted its coronavirus support in April. But according to Atradius economist Theo Smid, it was so effective that non-viable “zombie companies” were able to plod along for months yet.

Atradius expects around 4,100 bankruptcies in the Netherlands next year, still significantly lower than the 12,500 peak in 2013. The credit insurer assumes the Dutch economy will grow 0.9 percent but added that high energy costs, rising interest rates, and high wage demands could push more companies over the edge.

“There is an accumulation of risks, although these are mitigated if companies are also compensated for the high energy price,” Smid said.

Atradius expects a spike in bankruptcies in France (+58 percent) and Belgium (+49 percent), among others, this year already. The super-effective coronavirus support in the Netherlands delayed the blow, but companies now having to repay deferred taxes will accelerate it a bit.