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Rising insolvency numbers in 2024: Consequences of the pandemic and possible transformation opportunities for the economy
According to a report from www.faz.net, the new year started with a high number of bankruptcies after the number of company bankruptcies has grown month after month since June 2023 at double-digit rates compared to the same period last year. The number of insolvencies of partnerships and corporations for January is 1,077, about the same number as in December. The increasing number of insolvencies shows how badly the economy and companies in Germany are affected by the economic conditions and the consequences of the corona pandemic. Experts like Steffen Müller from the IWH say that the Corona aid played a role because it often went to unproductive companies...
Rising insolvency numbers in 2024: Consequences of the pandemic and possible transformation opportunities for the economy
According to a report by www.faz.net,
The new year began with a high number of bankruptcies, after the number of company bankruptcies has grown month after month since June 2023 at double-digit rates compared to the same period last year. The number of insolvencies of partnerships and corporations for January is 1,077, about the same number as in December.
The increasing number of insolvencies shows how badly the economy and companies in Germany are affected by the economic conditions and the consequences of the corona pandemic. Experts like Steffen Müller from the IWH say that the Corona aid played a role because it was often paid to unproductive companies that are now overwhelmed with the aid to be repaid in a difficult environment.
According to a study by BCG, the automotive, chemical and real estate sectors in German-speaking countries are particularly affected by restructuring and insolvencies. The German auto industry is faced with the challenge of asserting itself against competition from electric cars from Chinese manufacturers, while the chemical industry is suffering from increased energy and raw material prices and falling demand. The real estate industry, in turn, is struggling with problems due to the sharp turnaround in interest rates.
The Association of Volks- und Raiffeisenbanken (BVR) expects a 7.8 percent increase in corporate insolvencies to around 19,300 in 2024 and sees the poor economic situation as the reason for this development.
The bankruptcies also have positive aspects, says Andreas Bley, chief economist at the BVR, as they free up scarce resources that are more urgently needed in other areas. Nevertheless, bankruptcies also mean a blow of fate for the employees affected, because in January alone, 14,000 jobs in the group of largest companies were affected by bankruptcies.
Read the source article at www.faz.net