The wave of bankruptcies is the largest in 20 years. The German economy is in serious trouble

In the first quarter of this year, the highest number of companies went bankrupt in Germany since 2005, the Economic Research Institute reported on Thursday. Leibniz in Halle (IWH). 4,573 companies announced bankruptcy, which is more than in the analyzed quarters during the COVID-19 pandemic and the global financial crisis.

The authors of the report emphasized that the bankruptcy of 4,573 partnerships and capital companies is the highest result since the third quarter of 2005. This means that the number of bankruptcies was higher than during the global financial crisis in 2009.

Company bankruptcies affected a total of approximately 54,000. jobs, which is the highest result since the third quarter of 2020. At that time, it was related to the bankruptcy of several large companies, such as Esprit, Vapiano and Wirecard. Similarly to previous quarters, in the first quarter of 2026 the largest percentage of jobs at risk due to bankruptcies was in the processing industry.

The number of bankruptcies was particularly high in March. IWH analysis showed an increase of 17%. compared to February, up to 1,716 cases. Compared to the average for March in the years preceding the COVID-19 pandemic, the number of enterprises that declared bankruptcy was 71% higher.

The last time the monthly number of bankruptcies of partnerships and companies was higher was in June 2005, explained IWH.

As emphasized in the report, the increase in the number of bankruptcies in the first quarter of this year was mainly due to the increase in bankruptcies of smaller enterprises.

Forecasts for the coming months remain not very optimistic. “Our leading indicators do not leave much room for optimism in the second quarter of 2026“- said Steffen Mueller from IWH. He added that the number of bankruptcies will remain very high and may reach the level from March.

After two years of recession, the German economy will grow by 0.2% in 2025. In January, the German government lowered its GDP growth forecast for 2026 to 1.0%. from the previously expected 1.3 percent Economists also estimate that the US-Iran conflict in 2026 may have a negative impact on the global economy, including: by rising oil and gas prices, trade disruptions and inflationary pressures.

From Munich Iwona Weidmann (PAP)

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