Nova Credit Announces Estimated Bankruptcy Rate 0.185% in Q2 2022
According to the latest macro-economic data (as of 1 June 2022) and the unemployment rate (provisional figures) released on 17 June 2022, NOVA announces the latest estimated bankruptcy rate for the next 12 months at 0.185%. Based on the 5.6 million HK credit-eligible population, the estimated number of bankruptcy is about 10,472, which is slightly more than 7,197, the number of bankruptcy petitions in 2021 recorded by the Official Receiver’s Office throughout the year.
Calculation of this estimated bankruptcy rate is based on the latest macro-economic data in recent months, during the fifth wave of the epidemic in Hong Kong, two important indicators—the unemployment rate and gross domestic product (GDP) were significantly adversely affected.
Undoubtedly, the tightening of anti-epidemic measures has seriously impacted the local economy. The local economy deteriorated significantly in the first quarter of 2022. The GDP in the first quarter of 2022 fell by 9.77% from the fourth quarter of 2021. The latest figure is 6,726.17 million HKD, decreased 4.0% year-on-year. Personal Consumption Expenditure (PCE), an important consumption factor for GDP, also fell 13.73% quarter-on-quarter.
Meanwhile, the unemployment rate rise from 3.9% where is the lowest point in the past six months in November 2021 – January 2022 to 5.4% in February – April 2022, then fall slightly to 5.1% in the latest March – May 2022.
It is expected that economic in Hong Kong to resume normalcy under a stable epidemic situation while continue to adjust the social distancing measures in a timely manner according to Paul Chan, the Financial Secretary of Hong Kong, told a Legislative Council panel on 6 June 2022.
We will continuously monitor the macro-economic environment and its impact on the number of bankruptcy cases accordingly, leverage innovative technology for sharing valuable findings with the banking sector for making more accurate and timely business decisions.