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Denmark hits record low point with 331 bankruptcies filed in November

By Al Mayadeen English
Source: Agencies
6 Dec 2022 13:45
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A total of 331 companies filed for bankruptcy in Denmark in November, the highest number in 13 years, according to a new report.

Denmark braces for a record number of bankruptcies.

A report published by SMVdanmark said that in the month of November, Denmark witnessed the highest number of bankruptcies filed in 13 years, with a total of 331 companies filing for insolvency amid the current inflation and energy crisis sweeping across Europe.

According to the agency, which represents 18,000 small and medium-sized enterprises across the country, companies have since the start of the summer been "hit hard by high inflation, soaring energy bills and, not least, fears about the future of the economy, which have sent consumers' appetite for buying into a tailspin."

The report adds that several businesses were already suffering from Covid-19-related restrictions prior to the current crisis settling in.

"Never in the history of statistics have we seen so many bankruptcies among businesses with employees. This means that the crisis is hitting real businesses with turnover and employees", said SMVdanmark analyst Lasse Lundqvist in a statement.

Among the hardest hit industries are construction and retail industries, with construction companies alone accounting for more than half of reported bankruptcies in November.

“Unfortunately we will see even more bankruptcies in the coming months," Lundqvist concluded. He envisaged “rising unemployment” and “sad pedestrian streets” as many shops will have to close down.

Survey results among Denmark's largest banks reveal that six out of seven expect more customers to apply for loans in a bid to secure enough money for the coming winter.

Moreover, several companies are still struggling to repay their Covid-19 loans.

Statistics Denmark states that the country has been experiencing a sharp rise in consumer prices since November 1982.

Just two months ago, in October, inflation was recorded at 10.1%.

Overall, soaring energy prices are identified as the main culprit for inflation.

Despite that Denmark is estimated to be highly advanced in renewable energy sources, which include wind and solar energy that provide more than 50% of the country's electricity consumption, Denmark was not spared by the crisis that engulfed Europe as a result of the EU's reckless decision to sanction Russia.

Just like most of the other countries in the bloc, Denmark has encouraged its citizens to save up on energy and limit the use of hot water and electricity.