CEE insolvencies study 2024

• Corporate insolvencies in Central & Eastern Europe (CEE) upped in 2023.
• Nine countries experienced a higher number of insolvencies (Czech Republic, Estonia, Hungary, Lithuania, Poland, Serbia, Slovakia, Slovenia and Romania), with just three countries recording a decrease (Bulgaria, Croatia and Latvia).
• Economic performance in the region will remain below its potential in 2024.

In the wake of an economic downturn, Central and Eastern European (CEE) countries witnessed a dramatic surge in company insolvencies throughout 2023. While businesses initially weathered the storm thanks to government support measures during the pandemic, the subsequent withdrawal of these initiatives combined with macroeconomic pressures drove insolvency rates to new heights.

The economic downturn resulted in a drop of the region´s average GDP growth from 4.0% in 2022 to only 0.5% in 2023, resulting in the lowest rate this century (excluding the 2009 global financial crisis and the Covid-19 pandemic in 2020). Czech Republic, Estonia, Hungary, Latvia and Lithuania even recorded negative growth rates in 2023.

The consequences of Russia's invasion of Ukraine resonated throughout the region, not least due to its geographical proximity, disrupting supply chains and contributing to a surge in energy prices. These external shocks, coupled with internal challenges such as labor shortages and escalating input costs, have weighed heavily on businesses, leading to a significant increase in insolvencies. The construction and trade sectors, in particular, bore the brunt of the insolvency wave, grappling with labour shortages, wage pressures, and slowing demand.

Download the full CEE insolvencies STUDY 2024