Germany is witnessing a significant increase in corporate insolvencies, primarily driven by a lack of orders, rising costs, and challenges in securing follow-up financing. The Bundesbank has projected a sustained high level of insolvencies due to ongoing structural changes and an enduring economic downturn. The Federal Statistical Office reported a 22.9% rise in insolvencies in October, with sectors like transport, storage, and hospitality being particularly affected.
In 2023, expectations are set for over 20,000 corporate insolvencies, highlighting the severity of the economic situation. Eastern Germany is notably impacted, with nearly half of businesses there reporting financial difficulties. Despite the surge in corporate insolvencies, the number of consumer insolvencies has actually declined. Creditor claims have amassed to approximately 2.4 billion euros, reflecting the financial strain on companies.
The professional association of insolvency administrators anticipates a continued high level of insolvencies through 2025. Contributing to the rising insolvencies are bureaucratic hurdles and the lack of decisive government action, further exacerbated by uncertainties surrounding government formation. This situation has stalled critical legislative projects, adding to the economic gloom.
Experts note that the insolvency wave is a consequence of both the economic weakness and increased operational costs faced by businesses. The situation calls for urgent measures to stabilize the economy and support struggling sectors. Without intervention, the trend of increasing insolvencies could persist, threatening the stability of various industries and the overall economic landscape.
