The failure rate has risen slightly again, concludes Statistics Netherlands. In total, nearly 20 percent more bankruptcies were filed than last month, and it’s the third consecutive month that the figure has risen. However, there is a bright spot, according to macroeconomist Edin Mujagic.
“The good news is that in terms of total numbers we are still far below the recent average,” he explains, while at the same time acknowledging that people buy little because of it. In this sense, the upward spiral in terms of the number of bankruptcies is not good news. ‘If you compare the first six months of this year to the first six months of last year, there’s a 60% increase. And those are high numbers.’
“If you compare the first six months of this year to the first six months of last year, there’s a 60% increase”
Mujagic thinks it should be seen in some perspective, because last year saw an all-time low in bankruptcies and the world is emerging from a strange period. “The low point in terms of the number of bankruptcies was in the corona years,” Mujagic continues. “Partly thanks to the broad support that was given to the business community at the time.”
Logically
And therefore he finds it logical that the number of bankruptcies has increased. They come from a situation where there were many support funds for the business community. “That support was phased out, but it still existed in an environment where the economy has grown tremendously, like in 2022,” Mujagic explains. ‘And now we are in a situation where there is no support and existing support has to be repaid. And that while the economy is barely growing, companies are faced with ever higher costs and there is general uncertainty.’
In the Netherlands especially, this uncertainty is becoming a factor, now that the cabinet has become outgoing and the question is what kind of cabinet will show up. “When will there be a new cabinet and what policy will they pursue,” he continues. And while this isn’t necessarily a reason to pull the plug on your business, they are factors that can ensure that the number of bankruptcies continues to increase month-on-month in the coming months. Because it’s such a different environment than where we come from.’
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
