Germany endures biggest wave of firm bankruptcies in ten years

(MENAFN) Germany is facing its highest surge in corporate bankruptcies in a decade, with nearly 12,000 companies going out of business in the first half of 2025, according to a recent study by an economic monitoring agency.

The report, published on Thursday, reveals that around 11,900 German firms folded during the first six months of the year, marking a 9.4% rise compared to the same period last year. These closures impacted approximately 141,000 employees.

Patrik-Ludwig Hantzsch, the agency’s chief economist, highlighted the ongoing challenges facing German businesses, stating, “Despite some signs of hope, Germany remains mired in a deep economic and structural crisis. Companies are struggling with weak demand, rising costs, and persistent uncertainty.”

The outlook remains grim as Germany battles a recession stretching over two years. Hantzsch cautioned that the number of bankruptcies could climb further in the coming months, warning that “the persistently high level of insolvencies is increasingly triggering chain reactions.”

Although Germany’s GDP showed modest growth of 0.2% in the first quarter of 2025, weak global demand and unpredictable trade policies continue to weigh heavily on the economy. A recent survey from the Ifo economic institute indicated that German exporters’ expectations have worsened due to concerns over a possible trade conflict with the United States.

In 2024, the U.S. was Germany’s largest trading partner, with bilateral goods trade valued at approximately €253 billion (about $280 billion). Earlier this year, the U.S. imposed tariffs of 20% on all EU products, with higher rates of 25% on steel, aluminum, and automobiles. After threats of retaliation from Brussels, most tariffs were suspended for 90 days to allow negotiations, though a 10% base tariff and some 25% targeted duties remain in place.