Company bankruptcies accelerated in Germany
In Germany, company bankruptcies increased by 28.5 percent in April due to the recession in the economy and high interest costs.
The German Federal Statistical Office (Destatis) announced bankruptcy application data for April. Accordingly, bankruptcy applications increased by 28.5 percent in April compared to the same month of the previous year. There was a 12.3 percent increase in bankruptcies in the country in March compared to the previous year.
In Destatis’ statement, it was emphasized that bankruptcies were included in the statistics after the first decision of the courts and stated, “Double-digit growth rates have been observed in bankruptcies on an annual basis since June 2023.”
The office also announced the final data for February on company and individual bankruptcies in the country. Accordingly, the number of businesses that went bankrupt in February increased by 31.1 percent compared to February 2023, reaching 1,785.
Bankrupt companies left debts of 4.1 billion euros
In February 2024, the most bankruptcies were seen in the transportation and storage sector, with 9 cases per 10 thousand companies. This was followed by the manufacturing and construction sectors with 8 cases per 10 thousand companies.
The debt expected to be paid to creditors regarding companies’ bankruptcy claims was recorded as 4.1 billion euros. The debt in question was approximately 3.2 billion euros in February 2023.
Apart from corporate bankruptcies, 5 thousand 795 debtors also applied for personal bankruptcy in February. The figure in question increased by 12.3 percent compared to the same period in 2023.
The German economy shrank by 0.3 percent last year compared to the previous year due to unusually high inflation affecting purchasing power, high energy prices, falling investments, weak foreign demand and high interest rates. Germany was the only country among the G7 countries to shrink.
After a two-year recession, the country’s economy narrowly avoided entering a technical recession by recording 0.2 percent growth in the first quarter of the year.
However, the economy remains fragile, especially due to persistent weakness in the manufacturing sector, which plays a larger role than other countries in the region.
On April 24, the German government revised its official growth expectation, previously announced as 0.2 percent for 2024, to 0.3 percent, “with signs of slight cyclical recovery.”