German corporate insolvencies are projected to hit their highest level in more than a decade this year, a new study revealed on Monday, as the nation grapples with a stubborn economic downturn.
Approximately 23,900 companies are expected to file for bankruptcy in 2025, an 8.3% increase from 2024 and the highest figure since 2014, according to a report by credit agency Creditreform.
While that growth would be slower than in previous years, the rising numbers underscore deep-seated challenges facing German businesses following two years of economic contraction.
Many businesses are heavily indebted, struggle to obtain new loans, and are battling structural burdens such as energy prices or regulation, said Patrik-Ludwig Hantzsch, head of economic research at Creditreform.
“This puts small and medium-sized businesses, in particular, under immense pressure and is crippling many operations,” Hantzsch said.
2026 OUTLOOK REMAINS CLOUDED
This year’s increase in insolvencies has been driven by a rise in cases among smaller companies, with micro-enterprises, of up to ten employees, accounting for the largest share – 81.6% this year, marginally higher than in 2024.
While individually these have a lower impact on financial damages and employment, the financial toll on creditors, including suppliers and banks, remains substantial.
Creditreform expects financial losses from insolvencies to reach around 57 billion euros ($66.41 billion) in 2025, against 59.1 billion euros in 2024.
On average, financial losses per insolvency case will exceed 2 million euros, according to the report.
Within the workforce, corporate failures are expected to affect roughly 285,000 employees, a slight decrease from 291,000 in the previous year.
The report painted a cautious outlook for 2026, despite government plans for infrastructure and rearmament investments aimed at stimulating growth.
“The German economy is losing competitiveness,” said Bernd Buetow, CEO of Creditreform. “High costs, bureaucracy, and the ongoing economic weakness will continue to drive insolvencies.”
INSOLVENCIES SPREAD TO CONSUMERS
The negative trend extends to consumers, with personal insolvencies forecast to rise by another 6.5% in 2025 to reach approximately 76,300 cases – the highest since 2016.
“The main cause for this is the increasing over-indebtedness of people,” Hantzsch said.
He highlighted that some 5.67 million citizens in Germany are currently considered over-indebted.
“High living costs, job cuts, and rising unemployment are pushing many households to their limits,” he added.
($1 = 0.8583 euros)
(Reporting by Maria Martinez and Rene Wagner)
