Staff Reporter
Germany reported its highest number of company insolvencies since 2009 in the last quarter of 2024, according to a study released Thursday by the Halle Institute for Economic Research (IWH). This surge is attributed to rising interest rates and escalating prices.
The fourth quarter of 2024 witnessed 4,215 insolvencies, impacting nearly 38,000 jobs—levels not seen since the financial crisis of mid-2009. Compared to the same period in 2023, insolvencies increased by 36%, the IWH noted.
The institute links the recent rise in insolvencies not solely to the current economic crisis or the increased costs of energy and wages.
“Years of extremely low interest rates kept insolvencies at bay, and during the pandemic, government subsidies like short-time work benefits prevented many companies from failing,” said Steffen Mueller, head of insolvency research at IWH.
Mueller noted that the recent hike in interest rates and the removal of subsidies have led to a backlog of insolvencies from 2022.
In terms of sectoral impact, the services industry experienced the most significant increase in insolvencies, rising by 47% year-over-year, while the manufacturing sector saw a 32% rise.
