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International Internet Magazine. Baltic States news & analytics Thursday, 04.06.2020, 17:07

Number of insolvencies in Latvia, Estonia drops in 2016

BC, Riga, 22.09.2017.Print version
The number of company insolvencies in Latvia and Estonia dropped in 2016, while in Lithuania this number rose, writes LETA, according to representatives of credit risk insurer Coface, citing the latest data.

The number of bankruptcies declined 12.4% in Latvia, 10.9% in Latvia, but rose 35.2% in Lithuania.

Lithuania’s statistics were impacted by the State Tax Inspectorate and Social Fund’s process of “cleaning” the market of companies which had in reality been insolvent for some time, Coface representatives said.

At the same time, 2016 showed a continued decline of 6% in the number of company insolvencies in the Central and Eastern European region. This improvement was in line with the favorable macroeconomic environment, largely due to the positive situation on the labor market, with lower unemployment rates and rising wages.

The steepest rise in the number of insolvencies was registered in Hungary (56.9%), and the steepest drop was in Bulgaria (35.6%).

In terms of sectorial split, the construction sector faced the most difficult business environment. For some countries, such as Estonia, Hungary and Russia, insolvencies of construction companies represented over 20% of the total proceedings.

Coface Baltics director Mantvydas Stareika noted that the number of insolvencies in the region will continue declining also this year and next year. A positive signal is increase of GDP growth and recovery of investments.

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