BERLIN, Feb. 28 (Xinhua) -- Global business insolvencies in 2024 are to rise for the third year in a row, according to a study published by credit insurer Allianz Trade on Wednesday. The total number of cases is expected to increase by 9 percent year-on-year.
"Lower growth, trade disruptions, and geopolitical uncertainty set the stage for another acceleration in global business insolvencies in 2024," the study found. The United States, Spain, and the Netherlands are forecast to see the highest increases at around 30 percent.
"The after-shocks economy brings a large set of headwinds and challenges. These will now test the resilience of corporates that have become the most fragile over the past 3 years," said Aylin Somersan Coqui, CEO of Allianz Trade.
However, a wave of business insolvencies, such as the one seen after the financial crisis, is not expected. Following successive increases since 2022, global corporate insolvencies could stabilize at a high level in 2025, according to Allianz Trade.
Last year, the increase in global insolvencies accelerated by 6 percentage points compared to 2022, according to the study.
For this year, the Organisation for Economic Cooperation and Development (OECD) expects global gross domestic product (GDP) to grow 2.9 percent, followed by a "slight improvement" to 3 percent in 2025.
"Asia is expected to continue to account for the bulk of global growth in 2024-25, as it did in 2023," the OECD said at the beginning of the month.
Meanwhile, Germany is facing a 13 percent increase in company insolvencies in 2024, due to the "ongoing economic weakness, structural challenges and tighter financing conditions," in Europe's largest economy, Allianz Trade said.
"This increase has already begun, particularly in the second half of 2023," said Milo Bogaerts, Allianz Trade's CEO for Germany, Austria, and Switzerland. The hospitality industry, retail, construction, and B2B services have significantly contributed to this development.
