(Bloomberg) --
Bankruptcies among Swedish restaurants and hotels jumped by 123% in March as measures to contain the coronavirus pandemic stopped people from making trips and socializing.
The transport sector was also hit hard with bankruptcies rising by 105% in March compared to the same month a year ago, according to a statement from the business and credit reference agency UC. The overall number of companies going bust in Sweden last month increased by 9%, it said.
“It's clear that the virus is hitting the consumer facing and labor intense service sector extra hard,” Bloomberg economist Johanna Jeansson said. “This means pressure on the government to deliver even more support to help small and middle sized companies survive.”
Sweden's Social Democrat-led government and its coalition partners earlier this week announced new labor market measures after 36,800 workers were given notice in the period March 1 through 27. The figure was the highest on record and stands in sharp contrast to the slightly below 3,300 notices in March last year.
The government has also lowered its projection for growth and now expects Sweden's gross domestic product to shrink by 4%, the deepest contraction since the global financial crisis of 2008, and unemployment to rise to 9% in 2020. In a further blow
Read More: Sweden Pledges Extra $1 Billion for Soaring Number of Unemployed
UC also said suppliers to the automotive industry -- which are suffering from a lack of components -- and the transportation sector are next in line for more bankruptcies as the crisis continues to spread through society.
On a positive note, bankruptcies in the retail sector decreased by 17% compared to March last year, the agency said.
©2020 Bloomberg L.P.
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