After an average increase in bankruptcies of nearly 50 percent across the G7 markets from 2021 to 2023, a further double-digit rise is likely in 2024. But while the surge in bankruptcies sounds alarming, it comes from abnormally low levels during the pandemic, according to Oxford Economics.
The rebound in bankruptcies from the artificially depressed levels of 2020–2021 has been strong. Indeed, bankruptcy levels in 2023 in the G7 were on average higher than Oxford Economics’ modelling predicts they should have been, especially in Canada and the United Kingdom.
What's more, there looks to be scope for further “catch-up” in bankruptcies, as the cumulative level of failures in 2020–2023 was well below the modeled level in economies such as France, Italy, Germany and the United States, according to Oxford Economics.
Oxford Economics found modest evidence that a shake-out of the “zombie” firms that proliferated in the long period of ultra-low interest ra