The economy will rebound significantly in 2024, especially in the second half of the year. This will reflect on the financial health of both corporations and consumers. The number of debtors and the value of their debts will decrease, although spectacular changes should not be expected. Bankruptcies will not decrease in number, and improvements will be delayed until 2025. Despite better economic conditions, payment bottlenecks will remain a major barrier to growth, and the claim management market will continue to expand.
Year 2023 has not been favorable for economy. Record inflation, rising energy and fuel prices, and high loan interest rates made life incredibly difficult for the average consumer, as well as many businesses. One in three Poles surveyed by the National Debt Register reported that their savings have decreased in the recent financial period, mainly to cover daily expenses. Debt recorded in the National Debt Register also increased. By the end of November 2023, companies’ debts rose by PLN 1.1 billion, and consumers’ by PLN 2.4 billion. Furthermore, the average debt increased – for companies it reached PLN 36.6 thousand, while the average consumer owed PLN 20.3 thousand. This mostly affected those who had already been struggling.
Record numbers of bankruptcy were marked in 2023. Courts declared 21,000 consumer bankruptcies, an unmatched record. At the same time, 4,650 companies declared insolvency – 70% more than the previous year.
“Preliminary data for December indicate that we’ll see a slight decrease in debt, both among consumers and businesses. This trend should deepen in the New Year, but we should avoid excessive optimism. This decrease won’t be significant enough to overcome payment bottlenecks, one of the main barriers to the development of Polish companies. The number of debtors will remain high, so caution is advised when selecting clients,” commented Adam Łącki, President of the National Debt Register.
Economic improvement will influence not only the better condition of the Polish economy due to improving conditions in Europe, but also the disbursement of funds by the new government from the National Recovery Plan. However, significant effects of EU funds usage might not be expected until the second half of 2024 and 2025. For consumers, the purchasing power of their salaries is already increasing. Teachers’ pay will rise by 30%, which should improve the financial situation of public sector employees.
“The resulting increase in consumption will not only stimulate the economy, but also increase payment discipline. In our more than 20 years of experience, whenever Poles have more money in their pockets, they’re more willing to pay off their obligations,” added Adam Łącki.
Although debts will decrease in 2024, a decrease in the number of insolvencies should not be expected. Bankruptcy is always the result of long-term financial problems when debt exceeds the debtor’s assets. Therefore, in 2024, courts will receive bankruptcy or restructuring applications from those consumers and companies whose financial problems started in 2021-2022.
Despite the economic upturn, payment bottlenecks will remain one of the main barriers to growth. Many businesses, regardless of their size, delay payments as much as possible and use the money owed to suppliers to finance their current operations, rather than obtaining expensive working capital loans. Jakub Kostecki, President of Kaczmarski Inkasso points out, “With 5-6% inflation predicted for this year, this ‘comfortable’ approach will persist. Especially since our research shows that 44% of companies accept such practice.”
Building ethics in business will not be an easy task this year. However, those behaving honestly will benefit – concludes Katarzyna Starostka, expert of the Reliable Company.
