The number of insolvencies in Germany rose by 26.2 percent year-on-year in January amid a weak economy, according to the Federal Statistical Office.
The Federal Statistical Office (Destatis) released preliminary data on Friday, saying that double-digit annualised growth rates have been seen since June 2023. In addition, corporate insolvencies rose 23.2 percent in the first 11 months of last year.
We see a significant increase in corporate insolvencies, but still on the basis of a historically low starting point, Christoph Niering, insolvency administrator and chairman of the Registered Association of Insolvency Administrators (VID), said on Friday.
Niering also mentioned that the negative situation within the framework of high interest rates applies to “the construction and real estate industry.”
Health care, textile trade and gastronomy have been particularly affected by rising prices and weak consumer sentiment.
In order to improve the catering sector during the pandemic and energy crisis, the German government temporarily reduced the tax rate on restaurant meals from 19 percent to 7 per cent, but the normal tax rate applies from the beginning of 2024.
The past year was already difficult – in 2024 there will probably be even more corporate insolvencies, credit agency Creditreform warned at the beginning of the year.
Federal Minister for Economic Affairs and Climate Change Robert Habeck said Wednesday that the government will significantly lower its economic forecast for this year, expecting only 0.2 percent growth.
This is “dramatically bad,” Habeck said. “We can’t go on like this.”
