"Creditinfo Lietuva": Lithuania faces potential surge in bankruptcies, nearing 915

Lithuania faces a potential surge in business failures, with "Creditinfo Lietuva" forecasting that the number of bankruptcies could reach 915 this year. The credit information company's analysis highlights significant risks across several key economic sectors.

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The dynamics of fuel prices primarily affect the transport sector. However, construction and trade, as well as manufacturing companies, also feel its impact.

The most vulnerable sectors identified are wholesale and retail trade, construction, and transport and storage. "Creditinfo Lietuva" projects that these sectors could see 226, 167, and 125 bankruptcies respectively, with varying percentage changes compared to last year. Notably, the construction sector remains among the riskiest due to a lack of working capital, long payment terms, and high financing costs.

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Both more expensive and inconsistently priced diesel increase logistics, delivery, equipment operation, and supply chain costs. Companies that cannot quickly pass these costs on to customers experience margin pressure, which can later lead to growing debts, delayed payments, and a higher risk of bankruptcy.

Artūras Potelis, head of the commercial department at "Creditinfo Lietuva," pointed to several macroeconomic factors exacerbating the situation. Fluctuations in fuel prices are significantly impacting the transport sector, increasing logistics and operational costs. This pressure is also felt in construction, trade, and manufacturing. Additionally, rising "Euribor" interbank interest rates and inflation are squeezing company margins by increasing costs and affecting demand, leading to growing debts and a higher risk of insolvency.

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The transport and storage sector faces pressure not only from market demand fluctuations but also from the growing risk of debt and insolvency.