A Look at the Latest on Business Insolvencies in Germany: Decrease in May, But a Bumpier Road Ahead
Easing trend of German bankruptcy filings temporary relief granted - Decrease in Slight Bankruptcy Rate Observed in Germany – Temporarily
Hear ye, hear ye! The realm of Germany's business landscape has seen a shift as of late. The number of insolvency proceedings initiated in May 2025 dropped by 0.7% compared to the same period last year according to the Federal Statistical Office's preliminary data. But, the question lingers: Will all cases find their way through the insolvency courts?
Well, history tells us the exact time of application usually lies around three months prior.
The Slightly Brighter Picture - Trending Downward
The Leibniz Institute for Economic Research Halle (IWH) posted some positive data as well: After reaching a 20-year high in April, the number of insolvencies dropped significantly in May. There were 1,478 business insolvencies, a 9% decrease from the previous month, but still a 17% increase compared to May 2024.
It's steamin' Steffen Müller, head of IWH insolvency research, who predicts a slight dip in insolvencies for June. However, he also adds a sliver of concern, stating that Germany can expect more business insolvencies than in the previous year for some time to come.
Expecting a Spike Later in 2025
Germany's economy is not out of the woods yet. Various credit agencies predict a higher number of insolvencies for the year as a whole than in 2024. In fact, there were a record-breaking 21,812 cases in 2024, a figure not seen since 2015. High energy costs, extensive bureaucracy, and political uncertainty are among the heavy weights causing the burden for businesses.
For the first quarter of 2025, the local courts reported 5,891 insolvency applications—a 13.1% increase compared to the previous year. The total claims of creditors amounted to around 19.9 billion euros, compared to 11.3 billion euros in Q1 of 2024.
Businesses reacting to high electricity costs and a stagnant economy are contributing to the numbers. In addition, global economic uncertainty brings tariff uncertainties and a grim economic outlook further complicating the situation.
- Insolvency
- Germany
- Recession
- Federal Statistical Office
- Business insolvency
The community may find solace in the decline of business insolvencies in May 2025, as per the Federal Statistical Office's preliminary data, but it's essential to consider vocational training initiatives to sustain businesses during uncertain economic times. Financial support for these programs could be a viable solution for businesses as they navigate the challenging business environment and potentially a looming recession in Germany.
