Australia’s most populous state, NSW, is hurtling towards a record year of business closures fuelled by a potent cocktail of persistent high interest rates, inflation, and reduced consumer spending.

Data from the Australian Securities and Investments Commission shows that NSW is set to register the highest number of insolvencies since the data set from the corporate regulator started in 1999, reported The Australian.

While NSW is home to more businesses than any other region in Australia, the state’s insolvency rate has also climbed 43.3 per cent to 3695 this financial year to April 30, putting it on a path that will see it cross its previous high of 4,487 in 2008.

Encouragingly, among the major states in Australia, Victoria had the smallest growth in insolvencies with rates up 31.9 per cent to 2247, which will likely land it on its way to its worst year since 2016. The Northern Territory rose 22.6 per cent but to a small figure of 38.

Queensland had the third-highest rate of insolvencies at 1,608 as of April 30, a 39 per cent jump on the previous period. It will unlikely cross its peak of 2292 closures in 2012.

Tasmania meanwhile had the sharpest increase in the past year, up 144.4 per cent. But that figure is representative of a small base of 66, while the ACT rose 44.1 per cent to 147 and South Australia clocked in at 43.5 per cent with 353.

The worst regions for business defaults were in NSW and Queensland, according to CreditorWatch. The credit bureau says businesses in Bringelly-Green Valley and Merrylands-Guildford in Sydney’s southwest were expected to have the highest rate of defaults over the coming 12 months, at nearly 8 per cent.

In Queensland, Ormeau-Oxenford, Surfers Paradise, Broadbeach-Burleigh and Southport had the strongest risk for defaults.

In contrast, the regions least likely to see payment defaults in the past year were mainly in South Australia and Victoria, with Borwood, Unley, Ballarat and Yarra Ranges among the most stable areas.

There have been several high-profile examples recently of businesses entering insolvency. Tier 2 commercial construction firm Stevens Construction entered into voluntary administration recently, landing 10 projects across Sydney and the Central Coast at risk.

Sunshine Coast-headquartered airline Bonza, also entered into voluntary administration on April 30, while acclaimed designer label Dion Lee entered into voluntary administration recently months after Taylor Swift wore the label at the Super Bowl that drew a reported viewership of more than 123 million.

Australia’s latest inflation data suggest that there are still pressures suppressing consumer spending. The monthly consumer price indicator climbed 3.6 per cent from a year earlier, exceeding economists’ estimate of 3.4 per cent.

Analysts therefore expect the Reserve Bank to keep interest rates at a 12-year high next month during its next meeting.