UK: the number of bankruptcies in Sweden increased to its highest level in at least ten years in January as the ongoing housing market crisis increased the pressure on construction companies.
The media outlet cites credit reference agency UC as saying that there were 622 bankruptcy filings in total, a 47% increase from the previous year.
The housing market in Sweden is currently experiencing its worst downturn in three decades. 130 builders filed for bankruptcy last month as a result of the situation, which has led to an increase in defaults in the construction industry. According to reports, home prices have dropped by 16% since their peak in the first quarter of last year, and economists expect the decline to continue.
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We witnessed bankruptcies in consumer-facing industries during the fall, including retail, lodging, and dining, according to UC economist Johanna Blome. We can now see that the fastest growth is taking place in fields with strong links to business and longer-term investments.
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The largest economy in the Nordic region has suffered from a severe downturn in the Swedish real estate market. The National Board of Housing in Sweden predicts a sharp 44% decline in new home construction this year, to 33,000. The report also cautioned that a decline in construction could have a negative impact on economic activity.
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At the end of 2022, the Swedish government declared that the nation had entered a recession that would last until 2025. The GDP of the country is anticipated to decline by 0.7%, and unemployment is anticipated to increase to 7.8% in 2023 and 8.2% in 2024.