Japanese corporate bankruptcies rose 21.4 percent
in July from the same month last year because of a slump in
personal consumption and a decline in public spending, a private
research agency said Monday.
A total of 1,617 companies declared bankruptcy during the month,
leaving behind a record 4.264 trillion yen ($39.3 billion) of debt,
more than three times the July 1999 figure, said Teikoku Data Bank.
The debt figure reflected the failure on July 12 of Sogo Co., a
major department store operator, and 28 of its group companies. In
all, they left behind 2.92 trillion yen ($26.9 billion) in
liabilities, or about two-thirds of the total for the month,
Teikoku said.
The double-digit percentage rise in the number of corporate
failures resulted in part from a sharp decline in bankruptcies in
July 1999 following government measures to boost lending to small-
and medium-sized enterprises. The rise in failures this year is a
sign those steps have worn off, Teikoku Databank said.
Recession-induced bankruptcies totaled 1,238 cases, or 76.6
percent of the total, and the highest figure in the postwar period.
In addition to Sogo, confectioner Nagasakiya Co., went bankrupt
in July, leaving behind liabilities of 10.75 billion yen ($99.1
million). The two firms bring the number of failures among listed
firms so far this year to eight.
Japan is struggling to emerge from its longest recession in
decades. The economy grew 0.5 percent in the fiscal year that ended
March 31, following two years of contraction. The government
predicts the economy will grow 1.0 percent in the current fiscal
year.
