Financial statements 2020: the impact of Covid-19 on SMEs
How much have Italian SMEs been affected by the pandemic?
Italian companies have withstood the blow of the pandemic.
According to a preliminary analysis carried out by s-peek on a sample of 50,000 Italian companies*, 49% of them have maintained a stable rating despite the limitation of activities caused by the pandemic.
Of course, there was a downturn, yet not to the extent initially expected. Out of the sample of companies surveyed, "only" 28% saw their rating fall by one or more grades, compared to the 82% initially expected. On the other hand, 17% of companies saw their rating upgraded, again far exceeding the expectations of 1,3%.
As the distribution of companies per rating class shows, there was not the expected massive downgrade to CCC and the depopulation of the first two classes, but the number of companies in the mid-range (BB and B) declined. Compared to 2019, the distribution of the companies appeared more polarized, with a slight increase both in the company belonging to the lowest classes (from CCC to D) and in the healthy ones (from BBB to AAA).
Bankruptcies increase in 2021
The default category (D) is a separate issue. Since the beginning of the pandemic, the Italian and European governments adopted a large set of measures aimed at "freezing" bankruptcies. Also thanks to the slowdown of court's activities, the number of bankruptcies fell by about a third in 2020, which caused the decrease of companies classified in default.
However, bankruptcy proceedings increased again in 2021, especially among wholesale and retail businesses.
Encouraging signs: Italian GPD rebounce
The Italian National Institute of Statistics (ISTAT) has confirmed Italian GDP has already grown by 4.7% in the current year, the highest growth rate since 1995. It's the long-awaited rebounce after the 8.9% contraction (one of the largest among OECD countries), in line with the government's estimates at the beginning of the year. GDP growth is expected to reach 5.9% by the end of the year, before settling back to 4.1% during the next year. A return to pre-covid levels is expected by the first half of 2022.
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