Rise in German Business Insolvencies Amid Economic Slowdown

15 Nov, 2023

Rise in German Business Insolvencies Amid Economic Slowdown

Provisional figures from the Federal Statistical Office (Destatis) reveal a 22.4% year-on-year increase in business insolvencies in Germany for October. This double-digit rise, consistent since June, indicates economic challenges, particularly impacting sectors like construction, real estate, and healthcare, as noted by the Registered Association of Insolvency Administrators (VID). The Halle Institute for Economic Research (IWH) reports insolvency figures surpassing pre-COVID-19 levels, hinting at potential increases in the coming months. The German government's lowered growth forecast and recession expectation for 2023, driven by high inflation, energy costs, and labor expenses, prompt economic concerns. Deloitte's survey reveals companies relocating value creation abroad, emphasizing the need for economic measures. Last week, the German government introduced a package to reduce electricity costs for industries, a move applauded by Chancellor Olaf Scholz.