2023-07-13 09:27:45
Because of the recession and rising borrowing costs, more and more companies in Germany are on the brink of collapse. In April, the number of insolvencies reported to the district courts rose by 14.4 percent compared to the same month last year to 1,428, as the Federal Statistical Office announced on Thursday. “The number of corporate insolvencies has been increasing continuously since August 2022,” the statisticians explained. The local courts put the claims of the creditors at around 1.3 billion euros. In addition, 4,906 consumer bankruptcies were reported in April, 5.1 percent fewer than a year earlier.
The negative trend in corporate insolvencies could continue. This is indicated by the development of the standard insolvencies applied for, which increased by 13.9 percent in June compared to the same month last year. In May there had already been an increase of 3.1 percent. These proceedings are included in the statistics only after the first decision of the insolvency court. In many cases, however, the actual time of filing for insolvency is almost three months earlier. In addition, these statistics only show business closures that take place in the course of insolvency proceedings – but not those for other reasons or before the onset of acute payment difficulties.
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Based on 10,000 companies, there were four corporate insolvencies in April. Most of the insolvencies, with ten cases, were in the transport and warehousing sector. Then came the area of other economic services, which include temporary work agencies, for example, with eight cases. The lowest insolvency frequency with only one case per 10,000 companies was in the energy supply sector.
From January to March, the German gross domestic product (GDP) shrank by 0.3 percent and thus for the second quarter in a row, putting Europe’s largest economy in recession. Leading institutes are also expecting a decline in economic output for the year as a whole. In addition, interest rates have risen, with which the European Central Bank (ECB) wants to combat inflation.
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