Portugal’s restaurant sector has been the most affected by the crisis, with bankruptcy cases shooting up 143% since the beginning of the year, according to data from credit management group Coface.
During the first quarter of 2012, insolvency cases increased 51.5%, which means an average of 26 businesses are closing down a day.
The restaurant industry is the most affected due to the VAT increase from 13% to 23% and a decrease in consumer power, all as a result of the government’s austerity measures.
However, the president of the Confederação do Comércio e Serviços de Portugal (CCP), the Portuguese confederation of commerce and services, says these bankruptcies only represent 10% of the total number of businesses closing down.
Vieira Lopes said: “The official numbers refer only to companies that have been closed down through the judicial means. We estimate these companies represent only 10%.”
José Manuel Esteves from the Associação de Restauração e Similares de Portugal (ARESP), the national association of restaurateurs and similar enterprises, believes that hundreds of other businesses, mainly micro and small family enterprises, are closing down every month.
“These are the silent business closures and more are expected from May, when the payment of VAT for the first quarter of the year is due.”