Global business insolvencies are forecast to increase by more than 11% in 2024 and to peak with a rise of 2% in 2025, according to Allianz Trade’s Global Insolvency Outlook 2024.
Looking ahead to 2025, US insolvencies are forecast to rise by 12% to more than 27,000 companies. Across Europe, German corporate insolvencies will increase by 4% in 2025. According to the report, both France and the United Kingdom will see the number of bankrupt firms decrease by 6% in 2025.
This global instability in business insolvencies is partly due to still-subdued global demand, persistent geopolitical uncertainty, and uneven financing conditions. “That’s why countries accounting for more than half of global GDP will be hit by double-digit insolvency increases in 2024, and two-thirds may surpass their pre-pandemic numbers this year,” explains Aylin Somersan Coqui, CEO of Allianz Trade.
“By 2025, over 1.6 million jobs could be on the line in these regions, 8% of the total number of people unemployed, marking the highest level in a decade,” the report says. The main sectors at risk are the construction, retail and services sectors, which have already seen the strongest increases in business insolvencies in terms of both frequency and severity.
The easing of monetary policies and lower interest rates could offer some relief to businesses.
