The first four months of 2022 saw a significant increase in the number of international companies and domestic businesses filing for bankruptcy in Switzerland. According to a new report by finance firm Creditreform, insolvencies have now exceeded pre-pandemic levels, with over 2.000 companies going bust since January.
Businesses in Switzerland go bust after COVID relief ends
The report found that, between January and April 2022, 2.108 businesses in Switzerland declared bankruptcy. This is around 5 percent more than the number of bankruptcies recorded in the first four months of 2018 and 2019.
According to the report, the significant rise in bankruptcies is due to the scrapping of financial relief given by the government to businesses during COVID. The authors of the report noted that many companies have only survived until this point because of government assistance and would have gone bust much earlier if the pandemic had not happened.
At the same time, they found that the number of entrepreneurs that have started new businesses in Switzerland has declined by 5 percent over the last four months. In all, Creditreform predicted that 6.700 companies will go out of business by the end of the year - 1.500 more than in 2021.
Job losses and inflation could drive up personal bankruptcies
On a more positive note, the report found that the number of people personally declaring bankruptcy has fallen. A total of 2.863 personal bankruptcies were reported between January and April, a decrease of 10 percent compared with the same period last year.
However, Creditreform warned that the threat of rising inflation, job losses, shortages of workers and supply issues may reverse this trend. Once unemployment benefits and emergency relief is exhausted, Creditreform predicts that current economic hardships will be reflected in bankruptcy data in the coming years.