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Corporate bankruptcies are increasing at double-digit rates in most advanced economies as borrowing costs rise and governments unwind pandemic-era worth trillions of dollars support for struggling businesses.

Businesses weathered the precipitous downturns triggered by the pandemic thanks to massive government support schemes for companies and households that amounted to more than $10tn, according to IMF for 2020 and the first four months of 2021. But since then the packages have been largely withdrawn.

Shearing warned that the trend was set to continue as many businesses will have to refinance debt at higher rates in the coming months, even if central banks’ rate rises are forecast to have peaked.

The surge in bankruptcies will weigh on global economic activity and job growth in the next few years, according to analysts.

Rating agency Moody expects the global speculative-grade default rate to continue to increase in 2024 after reaching 4.5 per cent in the 12 months to October, above the historical average of 4.1 per cent.

In , the and , bankruptcies were up more than 30 per cent year on year in October, according to national statistics offices. The Paris-based OECD group of mostly rich nations recently noted that in some countries — including Nordic nations Denmark, Sweden and Finland — corporate bankruptcy rates have during the 2008-09 global financial crisis.