Polish banks beat the alarm, informing against An upcoming wave of corporate bankruptcy. Economists' forecasts are worrying, and the increasing number of companies facing financial problems seems to confirm these concerns. In this article we will examine the situation on the market, look at the causes of the problems of companies and consider the consequences of the bankruptcy wave for the Polish economy.
From the latest study “The portfolio of claims of Polish companies” prepared by National Debt registry (KRD) it is clear that the debt of companies in Poland is increasing at an alarming rate. yet first 4th of 2024 The full amount of outstanding liabilities of undertakings amounted to over 35 billion PLN. It's about 2 billion PLN more than a year earlier. There is besides an increase in the number of companies that have problems with timely regulation of their liabilities.
These data coincide with warnings from the banking sector. Bankers indicate a crucial increase in debt restructuring applicationsand on deterioration in the quality of the credit portfolio. Many companies, especially in the sector SMEs, struggling with liquidity problemswhich may lead to insolvency and consequently bankruptcy.
The causes of the expanding number of bankruptcies are many. Among the most crucial are: high inflationwhich importantly increases business costs. Increases in natural materials, energy and wage pressures, due to the expanding expectations of workers in the face of costly prices, have a negative impact on the financial condition of companies.
That's what they do. rising interest rates. Interest rate increases to combat inflation translate into Higher debt handling costs. Companies that have drawn improvement credits now face higher instalments, which is simply a serious burden for many of them.
An crucial origin is besides Economic downturn. In both Poland and Europe, we observe a decline in economical growth. little request for goods and services translates into lower corporate revenueswhich further exacerbates their financial situation. In this context, it is besides crucial supply chain disturbanceswhich are inactive a problem for many industries.
Most at hazard of bankruptcy there are companies in sectors that are peculiarly susceptible to economical fluctuations. Among them can be mentioned construction, transport and retail. They are besides in difficulty energy-intensive companieswhich are peculiarly powerfully affected by the emergence in energy prices.
Data Central economical Information Centre (COIG), in 2023 bankruptcy or restructuring 3372 companies in Poland. It's about 40% more than in the year 2022. W first 4th of 2024 bankruptcy and restructuring 1461 dic 49% from 980 reported in first 4th of 2023. These indicators clearly indicate deteriorating situation and can announce further increase in bankruptcy in the following months.
Bankruptcy Wave may have serious consequences for the Polish economy. First of all, increase unemploymentBecause failing companies will be forced to fire employees. This can besides lead to decrease in investmentbecause entrepreneurs, fearing for the future, will abstain from fresh projects.
Company failures may besides negatively affect banking sector, expanding credit hazard and leading to losses. As a consequence, this can lead to credit restrictionswhich will further exacerbate the economical downturn.
What can you do to prevent a wave of bankruptcy? Government and state institutions should take action to Enterprise support, in peculiar those in the SME sector. Possible solutions include facilitating access to finance, anti-inflation shield for companies as well as aid schemes for the sectors most affected by the crisis.
It is besides crucial that entrepreneurs themselves took action to improve its financial situation. In this context, it is crucial cost rationalisation, search for fresh outlets and investment in innovationwhich can increase the competitiveness of the company.
The marketplace situation is dynamic and hard to predict. Much depends on further economical developments, both in Poland and in the world. Nevertheless, bank warnings and statistics indicate real hazard of bankruptcy wave. Both the government and entrepreneurs should take appropriate steps to minimise the negative effects of this phenomenon on the Polish economy.
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