Germany has reported its highest number of monthly bankruptcies in 20 years, according to new data released Thursday by the Leibniz Institute for Economic Research. The report shows that 1,626 companies declared bankruptcy in April, marking an 11% rise from March and a staggering 21% jump compared to April 2023.
The surge surpasses the levels seen during the global financial crisis of 2008–2009, highlighting growing financial distress across the country’s business sector. While larger corporate failures have remained relatively stable, researchers at the institute attribute the unexpected increase primarily to a sharp rise in small business insolvencies.
“The data indicates an unusually high number of bankruptcies among smaller enterprises, which has pushed overall figures well above projections,” the report stated.
This spike comes amid broader concerns about Germany’s economic resilience. The country, often considered Europe’s economic powerhouse, has faced a series of challenges over the past year, including persistent inflation, high energy costs, and subdued consumer demand. These pressures have hit small and medium-sized businesses particularly hard, many of which are still recovering from pandemic-related losses.
Analysts suggest that rising interest rates and tightening credit conditions may also be contributing factors. As borrowing becomes more expensive, smaller businesses that rely on short-term financing are finding it increasingly difficult to manage operational costs.
The Leibniz Institute warned that if the trend continues, it could have ripple effects throughout the broader economy. “These bankruptcies, especially among small businesses, are not just isolated events — they can lead to job losses, unpaid debts, and weakened supply chains,” the report added.
Government officials have yet to announce any immediate response to the rising bankruptcy numbers, but the data may add pressure on Berlin to provide targeted support for vulnerable businesses. Some economists are urging policymakers to reconsider fiscal and regulatory measures aimed at easing the burden on small enterprises.
As Germany grapples with an uncertain economic outlook, the April bankruptcy figures underscore the fragile state of its post-pandemic recovery — and the growing challenges facing entrepreneurs across the country.
