Signs of collapse in Germany’s economy rises more and more with 1530 companies went bankrupt just in October
The number of corporate bankruptcies in Germany rose sharply in October, the Leibniz Institute for Economic Research has revealed.
The number of bankruptcies registered reached 1,530 which is the highest number recorded in October in 20 years, according to the institute’s bankruptcy trends.
According to Steffen Müller, head of the institute’s bankruptcy research department, attributed the current rise in bankruptcies in Germany to several factors.
He explained that the ongoing weak economic performance coincides with a significant increase in wage and energy costs, in addition to the cumulative effects since the Covid pandemic, when government aid programs supported weak companies, which led to postponement of bankruptcies.
Compared to the average number of bankruptcies in October from 2016 to 2019, before the pandemic, bankruptcies this year are 66% higher.
“The current wave of bankruptcies is the result of a perfect storm of long-term economic weakness and sharply rising costs,” Müller said.
According to the institute, the most affected sectors are the construction, trade and services close to businesses.
However, the number of employees affected by bankruptcies is low, with only about 11,000 jobs affected by bankruptcies last month, compared to September when the number of employees affected was more than double, due to the absence of bankruptcies of large companies.
Given early indications, the German Leibniz Institute for Economic Research expects the number of bankruptcies to continue rising in the coming months.
