BERLIN, June 24 (Xinhua) -- Business insolvencies in Germany reached its highest level in around 10 years with figures from the first half of 2024 increasing by 30 percent year-on-year, credit agency Creditreform said Monday.
The number of insolvencies totaled 11,000 in the first six months of this year. Insolvencies among large companies with at least 250 employees doubled to 80, while medium- and small-sized companies, which make up the majority of insolvencies, saw an increase of up to 50 percent.
Companies continued to "struggle against the effects of the recession in 2023, ongoing crises and the weak economic development this year," said Patrik-Ludwig Hantzsch, head of economic research of Creditreform. He added that all these factors combined are crushing many companies.
According to Creditreform, all major economic sectors in Germany reported over a 20 percent increase in insolvencies, with the services sector being hit the hardest to see the figures climbing by 34.9 percent to a total of 6,500.
At the beginning of June, Germany's FTI Touristik, a subsidiary of Europe's third highest-selling travel operator FTI Group, filed for insolvency. The company announced that all bookings starting early next month were canceled, affecting 175,000 trips.
German retail giant Galeria is another prominent case. The Europe's second largest department store chain has filed for insolvency three times in three and a half years. Despite finding a new investor, it still faces further store closures.
Despite recent interest rate cuts by the European Central Bank, Creditreform still expects a further rise in corporate insolvencies by the end of the year.
