Extensive government aid packages and special legal regulations have reduced the number of global corporate insolvencies during the peak phase of the Covid 19 pandemic in 2020 and 2021. According to a study by the Allianz Trade credit insurer, which belongs to the Allianz Group, the number of insolvencies is now increasing sharply again and is approaching the global pre-crisis level. According to market researchers, the 2019 level in Germany will probably be reached before the end of this year.
Based on current figures, Allianz Trade experts expect a global increase in corporate insolvencies of 21 percent in 2023 compared to the previous year. For 2024, they forecast further growth of four percent. “Half of the countries we surveyed are projected to surpass pre-pandemic levels in 2023, and three out of five in 2024,” the study’s authors said in a statement.
In addition to the expiry of the Corona aid measures, the market researchers blame the adverse economic conditions worldwide for the increasing number of insolvencies: “Apart from demand, the ongoing pressure on profitability, weaker liquidity buffers and increasingly strict financial conditions are making the most vulnerable companies more resilient to the test,” they explained.
According to the authors of the study, the resurgence of corporate insolvencies in Germany started much later than in most other European countries due to “massive state support”. For the current year, they now expect 17,800 companies to be affected, which would mean an increase of 22 percent compared to 2022. Accordingly, the total number of the pre-crisis year 2019 should be reached before the end of the year. According to the forecast, the number of insolvencies will increase by another six percent to 18,900 in 2024.