Wave of insolvencies hits Germany: Highest bankruptcies in 20 years!

Wave of insolvencies hits Germany: Highest bankruptcies in 20 years!

In the second quarter of 2025, Germany recorded the highest number of bankruptcies in two decades. According to that Deutschlandfunk More than 4,500 partnerships and corporations became insolvent, which corresponds to an increase of seven percent compared to the previous quarter. This development not only shows the economic challenges that many companies face, but also a market shakeout that has become necessary as a result of rising interest rates and the decline in government aid.

What is particularly striking is that bankruptcies increased by 62 percent compared to the first quarter of 2020. This represents a serious change in the corporate landscape after years of extremely low interest rates that prevented many bankruptcies. In recent years, government support measures during the Corona pandemic have kept numerous but weakly positioned companies in the market.

Current insolvency figures and their effects

In June 2025, 1,420 bankruptcies were registered, a decrease of four percent compared to the previous month. Nevertheless, there is a worrying increase of 23 percent compared to June 2024. Compared to the average values ​​from 2016 to 2019, the number of bankruptcies is 50 percent higher. Over 68,000 jobs will be affected in June 2025, which is 68 percent more than in the previous year and 43 percent more than the average for the pre-Corona times. These figures underline the serious economic consequences resulting from the current insolvency situation. This information comes from the IWH Insolvency Trend, a reliable source on insolvency activity and economic development, which was published on the same day that the Deutschlandfunk data was reported IDW Online.

The sector is reflected in the current statistics: the most significant increases in bankruptcies were found in the industrial sector, retail and the hotel and hospitality sector. With an increase of up to 80 percent, the states of Bavaria, Hesse and Baden-Württemberg show that the regional differences in the economic situation are serious.

Outlook for economic development

Steffen Müller, head of IWH insolvency research, attributes the high number of insolvencies to the rise in interest rates and the loss of state aid. This development makes it clear that the economic situation of many companies remains precarious and additional challenges could lie ahead. Many companies could face existential difficulties in the future if stabilizing support is not provided.

The IWH insolvency trend covers more than 90 percent of jobs affected by corporate insolvency and 95 percent of claims, making it a key indicator of economic development. The insolvency events of the last few months are a clear indication of the urgency of rethinking economic structures and introducing the necessary reforms in order to maintain competitiveness in Germany.