C-Suite Wednesday – Default Rates are Predicted to Rise to 3.6% in 2023

March 15, 2023

Delaney Sexton
Contributing Editor

C-Suite Wednesday – Default Rates are Predicted to Rise to 3.6% in 2023

PayNet is forecasting that the loan default rate in 2023 will be 3.6%, an increase of 1.6% from the actual default rates in 2022. Further, they are predicting that this rising trend will continue in 2024 with a forecasted default rate of 4.1%.

These are the predictions for the upcoming two years:

• Wholesale is expected to have the lowest default rate out of all industries (2.4%) in 2023.
• Wholesale’s default rate from December 2022 to January 2023 had the most significant decrease. In January, the default rate was 1.3%.
• In 2024, Wholesale will continue this trend and will have the second-lowest default rate, 3%.
• Agriculture is the industry with the second lowest default rate for 2023 at 2.6%.
• Transportation and Information have the highest forecasted default rates in 2023 at 5.2% and 5.1% respectively. In 2024, both are predicted to have the highest default rates of 5.7%.
• The education industry segment is predicted to have a default rate of 4.5% in 2023. Compared to the actual default rate in 2022 (1.6%), Education is forecasted to experience the largest increase in default rates this year.
• In 2024, PayNet forecasts that two industries will experience a decrease in default rates from 2023, those industries being Accommodation & Food and Healthcare.
• After an expected default rate increase of 2% in 2023 (0.8% in 2022 to 2.8% in 2023), the entertainment industry’s default rate should remain consistent in 2024.
• Entertainment is forecasted to have the lowest default rate in 2024 and is the only rate that will be below 3%.

Source:
PayNet Insights