Relief from insolvency pressures unlikely before H2 2027

Global insolvencies are projected to increase by 5% in 2026, as businesses continue to face high input costs, trade tensions, elevated energy prices, and tighter financing conditions. Insolvencies are expected to decline by 4% in 2027, with signs of normalisation expected to become visible during the second half of the year, according to the Atradius Insolvency Outlook published today.

Atradius notes that insolvencies have proven more persistent than anticipated earlier this year, prompting an upward revision to its 2026 forecast and a more modest decline in 2027. "The business environment remains challenging as high input costs and trade tensions persist," said Theo Smid, Senior Economist at Atradius. "Insolvencies are still expected to rise in 2026, based on realised data and our expectations for the remainder of the year. While we expect conditions to begin easing in 2027, this marks the start of a process rather than a full return to normal."

However, the expected decline in insolvencies is not being driven by a significant improvement in business conditions. Instead, it reflects a gradual adjustment by businesses to a more challenging economic environment. The latest forecast assumes that the most vulnerable firms will exit the market by early 2027, while surviving businesses continue to adapt their cost structures, financing arrangements, and pricing strategies to a higher-cost environment. This adaptation, rather than a significant improvement in economic conditions, is expected to drive the decline in insolvencies.

Regional developments

On a regional level, Europe and Asia-Pacific are both forecast to see insolvencies decline by 5%, while North America is expected to record a more modest 3% decrease. Across individual markets, the path to normalisation will not be uniform:

• UK insolvencies are expected to remain near historically high levels as post-pandemic debt, high borrowing costs, and weak consumer demand continue to weigh on businesses
• Romania is one of the few markets where insolvencies are expected to increase further, reflecting ongoing fiscal, political, and inflationary pressures
• Australia and South Korea are expected to drive much of the improvement in Asia-Pacific, as insolvencies ease from historically elevated levels
• In the US, insolvencies are expected to decline as firms adapt to the new environment of elevated inflation and interest rates, while economic growth remains relatively resilient.

To explore how to strengthen your own credit risk strategy, get in touch with us and see how we can help you stay ahead.