Germany has seen a notable increase in corporate insolvencies, with February figures rising by 7% from January and 20% from the previous year. The total number of insolvencies reached 1,436, marking a significant 54% increase over the average for the same month from 2016 to 2019. Particularly high numbers were reported in regions like Bavaria, Lower Saxony, and Saxony.
Despite the challenging economic landscape, there are signs of potential stabilization. The Leibniz Institute for Economic Research Halle (IWH) noted that early indicators, which forecast insolvency trends two to three months ahead, have fallen below last year's levels for the first time since late 2021. This suggests that the persistent rise in insolvency numbers may be slowing down, potentially leading to stagnating figures in the near future.
The current insolvency wave is attributed to the difficult economic conditions and delayed effects from the pandemic. During the COVID-19 crisis, many companies received government support, which temporarily postponed insolvencies. However, as these effects dissipate, the true impact on businesses is surfacing.
Alongside corporate challenges, private insolvencies also increased in regions like Schleswig-Holstein and Hamburg, by 8% in each case. Average debts among applicants remain substantial, exacerbating financial hardships for many individuals.
As Germany navigates through these economic hurdles, the outlook remains cautious yet hopeful. Experts believe that while insolvency numbers are high, the trend might soon begin to shift towards stabilization. This potential turnaround offers a glimmer of hope amid ongoing economic strains, highlighting the resilience of both businesses and individuals in the face of adversity.
