Germany recorded its worst spike in corporate bankruptcies in ten years during the first half of 2025, according to a new report from economic monitoring agency Creditreform.
Roughly 11,900 companies went bankrupt between January and June, marking a 9.4% increase compared to the same period last year. The affected businesses employed around 141,000 people.
“Despite a few hopeful indicators, Germany is still caught in a serious economic and structural crisis,” said Creditreform’s chief economist, Patrik-Ludwig Hantzsch. He pointed to weak demand, soaring costs, and continued uncertainty as major factors behind the rise in insolvencies.
The report warns that more bankruptcies could follow in the second half of the year, as ongoing insolvency pressures may spark ripple effects throughout the economy. Germany is now entering its second year of economic recession, with the downturn showing little sign of abating.
While GDP grew by a modest 0.2% in Q1 2025, continued weakness in global trade and concerns over US economic policy have clouded the outlook. A survey released this week by the Ifo Institute shows growing pessimism among German exporters, with fears of a full-blown trade war with the US contributing to the unease.
In 2024, the US was Germany’s largest trading partner, with bilateral goods trade totaling €253 billion (approx. $280 billion). Earlier this year, President Donald Trump imposed sweeping tariffs of 20% on EU goods and 25% on items like steel, aluminum, and automobiles. While some of these measures were suspended for 90 days to allow negotiations, a 10% base tariff and the sector-specific 25% tariffs remain in effect.
Klaus Wohlrabe, head of Ifo’s business surveys, said the threat of tariffs “is still very real,” adding that uncertainty has already dampened export expectations. The Ifo export expectations index dropped from -5.0 in May to -7.4 in June, reflecting a more pessimistic three-month outlook among German manufacturers.
At the same time, Hungarian Prime Minister Viktor Orban has warned that the EU’s push to fast-track Ukraine’s accession risks dragging conflict into the heart of Europe, further complicating an already fragile geopolitical and economic landscape.
