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By Elena PETROVA, Director and Arnaud MOLITOR, Manager, Deloitte Luxembourg
The context
The past few years have been rocked by a series of cumulative crises, bringing significant market shifts and macroeconomic upheavals. COVID-19’s damaging effect on the world’s supply chains saw severe goods shortages, leading to inflation. This inflationary stress was exacerbated by surging energy prices due to the Russia-Ukraine war. Amid these swift macroeconomic shifts, the ECB was forced to raise interest rates while companies and households struggled to cope with the pressure.
These factors are expected to reduce borrower repayment capacity, with rating agencies forecasting a rise in European...
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