Czech insolvencies surge by 62.4% in Q1 2011.

By bne IntelliNews April 5, 2011
The number of insolvency proceedings in the Czech Republic increased by 62.4% y/y to 5,421 in the first quarter of 2011, CTK newswire reported citing data from credit agency Creditreform. Individuals accounted for 71% of all insolvency cases, as their number rose by 88.3% y/y to 3,848. Insolvency requests by legal entities, mainly in wholesale trade, construction and catering, retail trade and freight transport, increased by 21.5% y/y to 1,573 and accounted for 29% of the total. The highest number of insolvency requests - 2,169, up by 51% y/y - was reported in March 2011, while the highest annual increase of 75.7% to 1,439 proceedings was reported in January. IntelliNews comment: These developments can be attributed to the effects of the global financial and economic crisis, which has severely affected the strongly export-oriented economy. However, while the business sector is gradually recovering, the labour markets developments are still adverse due to the time lag with which the labour market reacts, which explains the considerable increase in the number of personal insolvency proceedings. The number of companies in insolvency proceedings is to continue growing in the next months but at a slower pace, while that of individuals will keep its fast pace of increase.
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