The number of corporate bankruptcies is increasing due to economic weakness and increased energy prices

The number of corporate bankruptcies is increasing due to economic weakness and increased energy prices

According to a report by web.de, corporate bankruptcies have risen sharply this year due to the economic weakness, increased interest rates and increased energy prices. According to estimates by the credit agency Creditreform, 18,100 companies will have filed for bankruptcy by the end of the year, which corresponds to an increase of 23.5 percent compared to the previous year. The special effects from the corona pandemic have largely evaporated and the number of cases has normalized. The government has introduced temporary special regulations to prevent a wave of bankruptcies due to the pandemic. The number of consumer bankruptcies remained almost unchanged compared to the previous year at around 66,200 cases, but Creditreform expects the numbers to rise here too due to the weak economic outlook.

This development has a significant impact on the financial market and the general economy. The increased risk of insolvency leads to greater uncertainty for investors and lenders. Companies at risk of bankruptcy will have difficulty obtaining credit and may be forced to cut costs, which could lead to layoffs and a decline in economic activity. This would also have an impact on the stock market, as profit expectations for such companies would deteriorate.

In addition, the increased number of corporate bankruptcies could also impact the banking industry. A rise in loan defaults could cause banks to become more cautious about lending and tighten their lending standards, which in turn could limit lending and economic growth.

Overall, this development shows that the economic conditions remain difficult and the number of insolvencies is likely to continue to rise. This will pose major challenges for the financial industry and requires careful risk assessment and adjustment of business strategies.