The insolvencies in Bulgaria are decreasing, but in Central and Eastern countries are growing
Trends in insolvency in Central and Eastern European countries are turning – after falling from 6% in 2016 and from 14% in 2015, it grew by 6.4% in 2017. This is happening against the backdrop of improved economic activity in the region in recent years, especially when in 2017 average GDP growth rose to 4.5% – the highest since 2008. Nevertheless, the favorable business environment in 2017 was not enough to improve companies’ liquidity.
Under these circumstances, Bulgaria is one of the few countries in the region where the number of insolvencies for this period is decreasing. “Their total number in Bulgaria in 2017 is 311, which is equal to 0.08% of all companies. This figure shows a significant drop of 18.4% compared to the previous 2016, “said Milena Videenova, Manager of Cofas Bulgaria. “However, the situation is not so optimistic – Coface’s predictions are that these rates will decrease significantly in the coming years and, moreover, despite this decline, indebtedness remains high. This is a signal to companies to pay attention and manage risks, “she added.