In 2020, the Covid-19 pandemic hit the Swiss economy. GDP fell by 2.9% compared to 2019. However, despite the fall in economic output the number of bankruptcies fell by 6.7% compared to 2019.
In addition to a fall in the number of bankruptcies, the sum lost from closed bankruptcies fell 27%, after adjusting for the CHF 6.5 billion lost from the collapse of the Erb empire, Switzerland’s second largest bankruptcy after Swissair. Rolf Erb, the last CEO of the group, was convicted of fraud and sentenced to prison. However, he died in 2017 before his sentence began, according to Blick.
In 2020, 12,912 bankruptcies were filed in Switzerland, compared to 13,840 in 2019. The last time the number was as low as this was in 2014, when 11,842 filings were made. The total money lost by bankruptcies closed in 2020, after adjusting out the Erb bankruptcy, was CHF 1.7 billion, down from CHF 2.3 billion in 2019.
There are several hypotheses on why bankruptcies fell in the face of largest fall in economic activity since 1975. The Federal Statistical Office (FSO) points to government actions. Early on in the pandemic the Federal Council allowed overextended companies to continue trading without notifying bankruptcy courts. The government also provided substantial financial aid to struggling businesses.
In such a context, the FSO said it is difficult to interpret the 2020 bankruptcy figures. It recommends waiting to see what the numbers look like in 2021 or even 2022 before drawing any conclusions on the impact of the pandemic.