Business bankruptcies increased by 20.5 percent in Germany

The number of companies that went bankrupt in Germany increased by 20.5 percent in the first half of this year compared to the same period in 2022, reaching 8,571, due to the economic slowdown and rising loan interest rates. .

According to the statement from the Federal Statistical Office of Germany (Destatis), 8,571 companies declared bankruptcy in the country in the first half of this year. Bankruptcies increased by 20.5 percent compared to the same period in 2022.

In total, in the first half of the year, 25.3 bankruptcies occurred in Germany among 10,000 companies in the same period. The highest number of bankruptcies was recorded in the transportation and storage sector with 54.1 cases.

The rest of the service sector, including temporary employment agencies, followed with 41.3 cases.

THE DEBT REACHED 14 BILLION EUROS

The sector with the lowest number of bankruptcies was the energy supply sector with 2.4 cases.

Debt expected to be paid to creditors in connection with company bankruptcy claims amounted to €13.9 billion in the first half.

The debt in question amounted to approximately €8.2 billion in the January-June 2022 period.

In addition to business bankruptcies, 33,140 debtors also declared bankruptcy in the January-June period. The figure in question decreased by 1.9 percent compared to the same period in 2022.

BANKRUPTCY FILINGS INCREASED BY 13.8 PERCENT

According to the data, bankruptcy filings in August increased by 13.8 percent compared to the same period last year.

Steffen Müller, head of the department for Structural Change and Efficiency at the Halle Institute for Economic Research (IWH), highlighted that despite the increasing risks there does not seem to be a wave of bankruptcies and stated: “In the context of numerous economic crises due to the problems and uncertainty, a greater number of bankruptcies is expected in the coming months compared to the previous year,” he commented.

Meanwhile, the German economy has failed to grow for three consecutive quarters due to rising interest rates, a weak global economy and high inflation. While the economy contracted 0.4 percent in the final quarter of last year and 0.1 percent in the first quarter of the year, it failed to grow in the second quarter of the year.

While numerous crises such as the Covid-19 epidemic, supply chain disruptions and the war between Russia and Ukraine in recent years have revealed the weaknesses of the German economy, many countries, especially China, are producing more and more goods. imported from Germany and interest rates increase. due to high inflation, which further hinders the growth of the German economy.

THE ECONOMY IS EXPECTED TO TAKE A GLANCE

Slowing global growth, declining exports, high energy prices, declining industrial production and consumers’ efforts to cope with rising inflation also negatively affect the economy.

For this year, the Ifo expects a contraction of the German economy of 0.4 percent and the Kiel Institute for the World Economy (IfW) expects a contraction of 0.5 percent.

According to International Monetary Fund (IMF) forecasts, Germany will be the only G7 country expected to contract this year. (AA)