Admin I Thursday, Oct. 10, 2024
BERLIN – The number of corporate bankruptcies in Germany has reached a record high, a leading economic research institute said on Thursday.
The third quarter of 2024 saw more insolvencies than any other quarter since 2010, the Halle Institute for Economic Research said.
There were 3,991 insolvencies of individual and corporate entities in the quarter.
The previous peak was in the second quarter of 2010 with 4,071 insolvencies.
That came as the effects of 2008-09 financial crisis were still being felt.
This time, Germany’s stagnating economy and catch-up effects from the Covid-19 pandemic contributed to the rise, the institute said.
During the pandemic, government support programmes artificially kept insolvency numbers low, but many of those companies are now facing difficulties.
On Wednesday, the government lowered its economic forecast, predicting a 0.2% contraction for the current year.
Since June 2023, monthly insolvencies have been significantly above the pre-Covid average from 2016 to 2019.
The rise in insolvencies was most pronounced in Bavaria, with a 56% increase, and Baden-Württemberg, with a 42% increase, compared to the third quarter of 2023.
The corporate services sector saw a significant rise of 31%, while smaller sectors like real estate and housing recorded a 69% increase.
