Bankruptcies of German firms persistently on the increase.
Corporate bankruptcies in Germany are on the rise. The Federal Statistical Office revealed that during the first three months of the current year, 5,209 companies have filed for insolvency - a remarkable increase of about 26.5% compared to the same period in the past year. In fact, this number even surpasses the first quarter of 2020 by 11.2%. This is also interesting because the latter was known for its lower number of insolvencies due to special pandemic-related regulations.
The worrying trend continues: In May 2024, a staggering 25.9% more regular insolvencies were reported than the corresponding month in the prior year. Since June 2023, experts in Wiesbaden have observed consistent double-digit percentage increases when compared to the previous year. Insolvency statistics only include filings after the court's initial decision, which are generally recorded around three months after the actual application date.
Insolvencies in Germany are forecasted to reach approximately 20,000 cases in the current year. Experts attribute this to the various challenges during the Corona years, such as high energy costs and escalating interest rates. Additionally, the government's recent decision to withdraw the special regulations put in place to prevent bankruptcies during the pandemic has also contributed to this troubling trend.
In 2023, 17,814 companies in Germany faced insolvency, a low figure in comparison to the long-term context: back in 2009, during the financial crisis, an astonishing 33,000 German companies had to declare bankruptcy.
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The increase in company bankruptcies has led to concerns about potential leakages of sensitive business information during insolvency proceedings. In light of the high number of bankruptcies due to Corona regulations being lifted, some companies are considering reinforcing their data security protocols.
