CHINA – Media OutReach – 1 September 2020 – Atradius forecasts a jump in insolvencies across Asia in 2020, with Hong Kong expected to be one of the most affected markets across the globe. The increases are primarily driven by the impact the Covid-19 pandemic is having on global economies.
Every major economy, except for China, is expected to enter recession this year, the depth and length of which will be determined by the ability of economies to manage health regulations and either exit lockdowns or thrive in social distancing.
Atradius Chief Economist John Lorié commented, “Government measures have reduced the anticipated increase in bankruptcy filings in a range of ways. They have either shifted the threshold for filing, reduced debtor’s ability to force bankruptcy, or provided sufficient financial support to delay filings. However, as the support programs begin to expire, the number of filings should climb rapidly.”
Among Asian economies, Atradius forecasts insolvencies to rise 39% in Hong Kong, behind just Turkey and the United States in the global ranking. The city’s economy is in a deep recession and there has been little or no suspension of insolvency proceedings. However, Hong Kong’s government has implemented a sizable fiscal stimulus programme that has helped to dampen the number of insolvencies. Elsewhere in the region, Japan, Singapore and South Korea will experience a considerable growth in insolvencies during 2020 but see a significant decrease in 2021.
Bart Poublon, Head of Risk for Atradius APAC said, “The pandemic has put downward pressure on Asia’s export-driven economies as global supply chains come under pressure and demand wanes. However, as one of the first regions to reopen, Asia is well-positioned to benefit from the rebound in economic activity, which will lead to falling rates of insolvency in 2021.
Atradius is a global provider of credit insurance, surety and collection services, with a strategic presence in over 50 countries. The credit insurance, bond and collection products offered by Atradius protect companies around the world against the default risks associated with selling goods and services on credit.
Atradius is a member of Grupo Catalana Occidente (GCO.MC), one of the largest insurers in Spain and one of the largest credit insurers in the world. You can find more information online at www.atradius.com.hk