Germany: corporate bankruptcies sets a record high wing inflation rate rises

German corporate bankruptcies rose by nearly a third in May compared with a year earlier, according to official data that suggests they are now on track to break a level not seen in the country since 2017.

Figures published by the German Statistical Office on Friday showed that local courts reported 1,934 corporate bankruptcies with claims amounting to around 3.4 billion Euros ($3.7 billion).

This brings the total number of corporate bankruptcies to 30.9% compared to the same period last year, with preliminary data indicating increases of 6.3, and 13.5% for June and July, respectively.

Germany’s economy has been hobbled since Russia cut off gas supplies to the country, on which its industry relies.

Meanwhile, gross domestic product unexpectedly contracted in the second quarter, and the European Commission expects growth of just 0.1% for the year as a whole.

“Warning signs about corporate bankruptcies are increasing,” the Association of German Chambers of Industry and Commerce said in a statement, adding that it expected the total number to exceed the 20,000 mark for the first time since 2017.

“There is an urgent need to ease energy costs, taxes, bureaucracy, and faster approval and planning procedures in order to give companies better conditions for business success again,” the statement continued.

The Institute for Economic Research (IWH) in the eastern German city of Halle had previously said that the number of corporate bankruptcies in Germany had risen by a third in July to 1,406.

The institute stated in a statement that the number of jobs affected by bankruptcies in these major companies has reached 10,000 jobs.

The institute also explained that this significant increase in the number of bankruptcy cases includes all sectors, however, was particularly strong in the industrial sector, as the number of industrial companies that declared bankruptcy in July reached 145 companies, compared to 100 companies last June.

On the other hand, inflation in Germany rose to 2.6% in July, as consumer prices rose 2.5% year-on-year in June, according to the Federal Statistics Office.

The German Federal Statistical Office said that inflation in Germany fell to 2.5% in June, confirming what was stated in preliminary data.

Consumer prices in Germany, harmonized to make them easier to compare with other European Union countries, rose 2.8% year-on-year in May.