Although Slovakia is still below the pre-pandemic level in the number of company insolvencies, high energy prices, inflation and the coming recession in Europe may significantly accelerate the onset of bankruptcies. How deep the recession will be depends on the measures taken at European level, according to an analysis by insurance company Coface. In terms of sectors, firms with a weaker position in the supply chain, namely in the automotive and agribusiness sectors, may be particularly at risk. According to Jan Čarný, the CEO of Coface, the rules should allow for the extraordinary taxation of excessive profits of energy companies and support for industrial enterprises beyond the level of public support allowed so far.
In recent weeks, many large industrial employers in Slovakia have already announced existential problems, particularly in relation to energy prices. So far, the vast majority of production cutbacks due to high energy prices are happening in a controlled manner, without companies declaring bankruptcy or starting to pay their suppliers less. According to the analysis, the largest contributors to insolvencies have been construction firms that have not had the power to pass on input price increases to previously agreed contracts.
Source: TASR
