Corporate insolvencies have hit their highest level in a decade, a new study indicates

Germany endured the highest wave of corporate bankruptcies in a decade in the first half of this year, a study by economic tracking agency Creditreform has suggested.

The first six months of this year saw some 11,900 German companies go bust, the study released on Thursday indicates. The figure represented a 9.4% increase over the same period last year, according to the agency. Some 141,000 employees worked at the companies affected.

"Despite some signs of hope, Germany remains mired in a deep economic and structural crisis. Companies are struggling with weak demand, rising costs, and persistent uncertainty," Creditreform chief economist Patrik-Ludwig Hantzsch said.

The situation is expected to remain difficult as Germany continues to struggle with a recession that has dragged on for two years already. The wave of bankruptcies might ultimately increase in the next six months, given that the "persistently high level of insolvencies is increasingly triggering chain reactions," Hantzsch warned.

While German GDP grew by a slight 0.2% in the first quarter of 2025, weak global demand and uncertainty in trade policies continue to take a toll on its economy. According to a new survey conducted by the Ifo economic institute released this week, expectations have worsened among German exporters this month over uncertainty regarding a potential trade war with Washington. The US was Germany's top trading partner in 2024, with bilateral trade in goods totaling €253 billion (around $280 billion), according to official data.

Earlier this year, US President Donald Trump imposed 20% tariffs on all EU goods, with 25% on steel, aluminum, and cars. When Brussels signaled its readiness to retaliate, most of the levies were put on hold for 90 days to allow for negotiations. A 10% base tariff and the 25% targeted duties remained unchanged.

"The tariff threats from the US are still on the table. An agreement between the EU and the US has yet to be reached," Klaus Wohlrabe, head of Ifo surveys, said, adding that the uncertainty has lowered exporters' expectations, with the respective index falling to -7.4 points in June from -5.0 in May. The index measures how optimistic or pessimistic German manufacturing companies are about their prospects for selling abroad over the next three months.

(RT.com)