Corporate Bankruptcies in Germany Reach Highest Level Since 2015

Germany is witnessing a significant rise in corporate bankruptcies, with 2024 marking a 22.4% increase in insolvency filings compared to the previous year. This surge has raised concerns among experts, with predictions of an impending wave of insolvencies in 2025 potentially surpassing those seen during the financial crisis of 2009.

According to the Federal Statistical Office, February alone saw a 12.1% increase in bankruptcy filings compared to the same month in the previous year. This trend of double-digit growth in insolvencies has persisted since June 2023, with the exception of June 2024.

The total number of corporate insolvencies for 2024 reached 21,812, the highest recorded since 2015, when there were 23,101 cases. This represents a continuation of a troubling trend that had already spiked by 22.1% in the previous year.

Moreover, creditor claims have more than doubled, amounting to EUR58.1 billion in 2024, up from EUR26.6 billion in 2023. A significant contributor to this escalation is the rise in large insolvencies, defined as those with claims exceeding EUR25 million, which surged by 127.5% to 314 cases.

In examining the sectors most impacted, the transportation and warehousing, construction, and various economic services such as temporary work agencies reported the highest rates of insolvencies, with 63.5 corporate bankruptcies per 10,000 businesses. In contrast, individual bankruptcies saw a more modest increase of 6.5%, totaling 71,207.

Looking ahead, experts at Crif anticipate the number of corporate bankruptcies could reach up to 26,000 in 2025. They attribute this potential increase to a combination of high energy costs, supply chain disruptions, and ongoing political uncertainties. There are concerns that the rise in major bankruptcies could trigger domino effects through interconnected businesses.

While some analysts, like those from Creditreform, warn of a situation that could eclipse the crisis levels of 2009, others, including economists from the Leibniz Institute for Economic Research in Halle, suggest that early indicators might show a stabilization or even a slight decline in bankruptcy rates.

This evolving economic situation underscores the challenges facing many businesses in Germany as they navigate a complex landscape of rising costs and market pressures.