Recent Global Insolvency And Economic Trends

At the start of the pandemic, insolvency filings were expected to increase by 35% in 2020 and 2021. While some industries were hit hard, this prediction never materialized in Canada and the U.S., possibly because of significant financial government support. The future is less clear, with Allianz Research forecasting, for 2022, a 15% increase in insolvency filings and a 5.5-6% decrease in global economic growth.

Below are five key trends that may impact insolvencies this year, based on data published by the World Bank:

1. Global Debt. Going into the pandemic, it was estimated that both public and private global debt levels were at about US$200-trillion. That number has now climbed to 265% of the global domestic product. The pace of recovery in advanced economies appears to be stronger than in emerging markets.