BERLIN / LONDON (IT BOLTWISE) – The German economy is facing a challenging situation: While the number of company insolvencies rose again in October, there was also an increase in new businesses. Experts are calling on the federal government to take measures to ease the burden on companies in order to ensure competitiveness.
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The German economy is currently confronted with a sustained wave of corporate bankruptcies. In October, the number of regular insolvencies filed rose by 6.5 percent compared to the previous year, as reported by the Federal Statistical Office. This development follows an increase of around ten percent in September, underlining the urgency of the situation.
The transport and storage sectors are particularly affected, followed by the construction industry and the catering industry. The chief analyst at the German Chamber of Commerce and Industry (DIHK), Volker Treier, emphasizes that not so many companies have had to go out of business in August for a decade. Creditors’ claims amounted to 5.4 billion euros in August, more than twice as much as in the same month last year.
At the same time, there is a positive trend in business start-ups. Around 99,300 new businesses were founded in the first three quarters of the year, an increase of 9.5 percent compared to the previous year. These start-ups indicate a certain dynamism and innovative strength in the German economy, even if the number of complete operational closures has also increased slightly.
The DIHK is calling on the federal government to take quick relief measures to ensure the competitiveness of companies. These include the promised reduction in electricity tax and the limitation of rising social security contributions. The challenges for companies are diverse: high energy costs, extensive bureaucracy and consumer reluctance to consume. In addition, state exemptions that applied during the corona pandemic have expired.
For the future, experts such as the credit insurer Allianz Trade expect a further increase in bankruptcies to 24,500 cases in the coming year. Nevertheless, there is hope that the situation could improve by 2027 thanks to economic measures from the federal government. A decline in bankruptcies of around four percent is then forecast.
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