Business bankruptcies decrease, rise in the EU

Bankruptcy declarations among EU businesses increased substantially in the fourth quarter of 2022 (+26.8% from the previous quarter), but Cyprus showed a decrease (-13.4%), according to Eurostat.

During Q4 2022, bankruptcies in the EU reached their highest levels since the start of data collection in 2015, as energy prices and inflation peaked.

In Cyprus during the same period, estimates show the third lowest level of bankruptcies ever recorded, following Q4 2021 and Q1 2022.

The number of bankruptcy declarations in the EU increased during all four quarters of 2022.

In Cyprus, there had been an increase during Q2 2022 before bankruptcy declarations continued decreasing.

Bankruptcies have decreased since Q1 2021 when they reached the highest recorded levels.

Regarding registrations of new businesses in the EU, these decreased slightly by 0.2% in Q4 compared with the previous quarter.

Generally, business registrations were higher in all four quarters of 2022 than during the pre-COVID pandemic 2015-2019.

The data on bankruptcy declarations in Cyprus during Q4 is based on Eurostat estimates. Also, the data does not include updated information on business registrations.

Looking specifically at bankruptcies by activity, all sectors in the EU registered increases in bankruptcies in Q4 compared with the previous quarter.

Transportation and storage (+72.2%), accommodation and food services (+39.4%), and education, health and social activities (+29.5%) were the activities with the highest increases in the number of bankruptcies compared with the previous quarter.

Compared with the pre-pandemic Q4 2019, the number of bankruptcies declarations was higher in most sectors of the economy.

Compared with Q4 2019, the largest increases in bankruptcies were recorded in accommodation and food services (+97.7%) and transportation and storage (+85.7%).

The number of declarations of bankruptcies compared with the pre-pandemic Q4 2019 was lower in only three sectors of the economy: industry (-17.6%), construction (-9.2%) and information and communication (-4.0%).