Halle Institute of Economic Research (IWH) has announced the company bankruptcy trends report for March in the country.
According to the report, last month, the number of bankruptcy filings of companies and partnerships in Germany increased by 24 percent compared to March 2022, to 959. Thus, bankruptcies rose to the highest level since May 2020.
The increase in bankruptcies was 15 percent compared to February.
“The times of extraordinarily low bankruptcy numbers are over for now”
Steffen Müller, Head of Structural Change and Efficiency at IWH, stated that the times of exceptionally low bankruptcy numbers are over for now. ” used the phrase.
Müller noted that leading indicators do not point to a further increase in the number of bankruptcies in Europe’s largest economy in the coming months.
While the Russia-Ukraine war has led to higher energy costs in Germany, which has Europe’s largest economy, the continuation of disruptions in international supply chains makes many intermediate goods imported for production in the country more expensive.
The energy crisis, lack of supplies and high inflation have been plaguing the German economy for months after the COVID-19 crisis caused significant job losses for many industries.
The monetary policy tightening of the European Central Bank (ECB) also increases the financing costs of German companies.
Meanwhile, German unions are demanding higher wage increases for workers in the face of unusually high inflation.