Sweden

Bankruptcies in Sweden increased for the seventh consecutive month in February with retailers squeezed by declining household consumption and the construction industry struggling in the wake of an ongoing housing market rout, Bloomberg News reported. Sweden’s economy is buckling under the weight of soaring consumer prices and increased borrowing costs. A recession may already be under way as indebted households, whose mortgage rates are typically fixed for short periods, tighten purse strings and a plunge in housing prices is rapidly reducing investments in new dwellings.

Sweden will probably be the only economy in the European Union to contract this year as high inflation erodes private spending and a housing slump hits construction, European Commission said, Bloomberg News reported. The largest Nordic nation faces a 0.8% decline in its gross domestic product in 2023, followed by expansion of 1.2% next year, according to new projections by the Brussels-based executive of the trading bloc, published on Monday. While the commission had in November also forecast a contraction for Germany, it now sees the EU’s biggest economy growing 0.2% this year.

The number of Swedish bankruptcies soared to the highest level in at least a decade in January, as construction companies come under pressure from an ongoing housing-market rout, Bloomberg News reported. The number of companies filing for bankruptcy increased by 47% from a year earlier in January, to 622, according to credit reference agency UC. The data highlights the effects of Sweden’s worst housing-price slump in three decades, which has contributed to a surge in defaults in the construction sector, with 130 builders filing for bankruptcy last month.

Scandinavian airline SAS said on Friday that it had agreed with another two of its aircraft lessors to amend the terms of existing lease contracts as part of its cost cutting efforts, Reuters reported. Crisis-hit SAS, which has been under chapter 11 protection in the U.S. since last year, said in a statement it had now amended contracts with in total 15 lessors representing 59 aircraft. "With these agreements, SAS concludes its lessor negotiations as part of the chapter 11 process," it said.

High energy prices and high inflation are hitting Sweden's businesses hard. With energy price subsidies for these consumers delayed, the government is now extending existing tax deferral schemes implemented during the pandemic to ease the pressure. Swedish Finance Minister Elisabeth Svantesson and Energy and Business Minister Ebba Busch announced the scheme on Dec. 29. “Many, many companies are now struggling with their liquidity,” Svantesson said.

A dual citizen of Sweden and the United Kingdom pleaded guilty to U.S. fraud and money laundering charges on Friday for selling a fake cryptocurrency alongside one of the United States' most-wanted fugitives, a woman referred to as the 'Cryptoqueen,' Reuters reported. Karl Greenwood, 45, was arrested in Thailand and extradited to the United States in 2018 for his role in selling the purported cryptocurrency OneCoin, which federal prosecutors in Manhattan call a pyramid scheme that defrauded investors out of $4 billion. He has been detained since his arrest.

Risks are piling on for Sweden’s commercial real estate sector as rising interest rates erode profitability and raise debt refinancing problems, the country’s financial supervisory authority said, Bloomberg News reported. As the Swedish central bank has responded to soaring inflation by rapidly raising interest rates, commercial property companies are facing rising costs and challenges in refinancing maturing debt.

The funding crunch afflicting Sweden’s leveraged property sector intensified late on Wednesday after a privately owned landlord signaled it needed more time to repay bonds that fall due next year, Bloomberg News reported. In what may be among the first instances of real-estate worries spilling over to the country’s bond market, little-known property developer Sehlhall Holding AB turned to its creditors to amend terms on its debt.

Bankruptcies for Swedish companies rose to their highest level since the start of the pandemic as prices are soaring and the country’s central bank is raising borrowing costs to quell inflation, Bloomberg News reported. In September, 635 companies in the largest Nordic nation went bankrupt -- the highest level since May 2020 --increasing by 38% from a year earlier, according to data from credit reference agency UC. The data adds to the gloomy picture for the Swedish economy that’s seen contracting the most in the Nordic region next year.