Business insolvencies in the Asia-Pacific region are expected to keep rising in the coming two years, according to a report by trade credit insurer Allianz Trade.
In its Global Insolvency Report, Allianz Trade is forecasting a 5% and 6% rise in 2025 and 2026, respectively, with the region ending 2024 with higher-than-expected increases in most markets.
Singapore recorded a 46% climb, while Hong Kong saw a 25% rise, particularly in the construction, wholesale and services sectors.
According to Allianz, Singapore, which hit a 24-year record could see a moderate downside trend reversal in 2025, while markets such as Taiwan and Hong Kong will see insolvencies continue to rise in 2025 as a result of weaker external demand and lagging effects of prolonged high levels of interest rate.
Construction is expected to remain in the doldrums in 2025 despite first signs of a potential bottoming out in real estate demand, while worries are likely to expand to more export-oriented firms, as they will continue to face headwinds from global trade due to China’s position in the global supply chain.
