Researchers say the government’s economic support has been a key factor in avoiding a wave of bankruptcies in Switzerland despite the Covid-19 pandemic.This content was published on August 10, 2020 - 17:34
More than 20% fewer companies went out of business between March and July than in the same period last year, the KOF Economic Institute said on Monday.
“The number of bankruptcies has not been significantly higher than expected in any major region or sector of the economy,” a statement said.
The researchers noted that even the hospitality sector and the entertainment industry have been affected “very little”.
However, the economic downturn was evident across all major regions of the country, but to varying degrees, the institute said.
One reason for the generally low level of bankruptcies could be the support measures taken by the government to soften the impact of the coronavirus crisis.
They included easier access to a compensation scheme for short working hours, a massive lending programme and a ban on debt collection which were put in place at the beginning of April.
However, the authors of the study – the KOF institute of the Federal Institute of Technology in Zurich and the digital business information company, Bisnode – warn it is too early to sound the all-clear.
They say some bankruptcies might simply have been postponed and experience in previous crises shows that the incidence of bankruptcies increases gradually rather than abruptly.
Meanwhile, the current unemployment rate in Switzerland remained stable at 3.2% in July.
About 148,900 people were registered as unemployed according to the State Sectretariat for Economic Affairs (SECO). That slightly fewer than in June, but more than 1% higher than in July 2019.
Boris Zürcher, head of the labour unit at SECO said an initial increase in the number of jobless people in March slowed down since April.
Zürcher also said he did not expect a massive wave of layoffs later this year.