Moroccan Business Bankruptcies Set to Surge 14% in 2020, Report Warns

According to the report of the credit insurance group, around 9,620 Moroccan companies could go bankrupt in 2020. Between 2019 and 2021, business failures in Morocco could increase by 25%. Moroccan companies are not the only ones to find themselves in such a situation. Globally, the situation is not very rosy either.

Business failures worldwide will reach their highest level since 2009. The group expects global failures to increase by 35% between 2019 and 2021 - which translates to 17% of defaults in 2020 and 16% in 2021.

Between 2019 and 2021, Euler Hermes expects the Asia-Pacific region to experience 31% failures. In Western Europe, increases will vary but will average 32%. Morocco’s main economic partners, Spain and France, will face increases of 41% and 25% respectively.

According to Euler Hermes experts, the situation could worsen in the second half of 2020 and the first half of 2021 due to the closure of commercial courts due to the coronavirus. They encourage governments to continue support measures for businesses. In the event of a suspension, business failures could reach 40% or even 45% between 2019 and 2020, they warn.

The group also notes that if the global economy is slow to experience a rapid recovery, defaults could likely reach 85% to 95%.