The number of insolvencies in Germany was higher in the third quarter of this year than in any quarter since 2010. The current downturn in the German economy is to blame, but also the lingering effects of the covid-19 pandemic, the Leibniz Institute for Economic Research in Halle (IWH) said in a report today.
Pandemic
At the time of the coronavirus pandemic, the number of insolvencies was kept artificially low by government support programmes. Many of the companies supported at the time are now struggling, said IWH head of insolvency research Steffen Müller.
In the third quarter of this year, 3,991 private and public companies went into insolvency. The figure was last higher in the second quarter of 2010, when 4,071 insolvencies were reported. At that time, the financial and economic crisis of 2008 and 2009 was still being felt, according to IWH.
Vulnerable properties
The large federal states of Bavaria and Baden-Württemberg in particular saw a significant increase in the number of bankruptcies. In terms of sector, companies involved in real estate and housing reported bankruptcies very frequently.
The German economy is the largest in Europe and many Czech companies depend on it. On Wednesday, the German government issued an updated economic outlook, according to which it no longer expects growth this year. Gross domestic product (GDP) will fall by 0.2 percent, it said. Last year, the German economy contracted by 0.3 percent and its performance was the weakest of any eurozone country.
source: ÄŒTK
