The year 2024 was a period of weak economic growth for Europe, driven by a challenging global environment. The main factors were high energy prices and geopolitical uncertainty. The European Central Bank continued its efforts to curb inflation, which in turn reduced investment, particularly in the construction and real estate sectors. Declining real incomes and economic uncertainty weakened consumer sentiment and reduced demand.

Corporate insolvencies continued to rise in Western Europe. Compared to 2023, they increased by 12.2%, reaching 190 449 cases, the highest level since 2013. Since the low point in 2021, when 112 686 cases were recorded, the number of insolvencies has grown by almost 70%, and forecasts indicate that the upward trend is likely to continue. The situation was exacerbated by high energy costs, persistent inflation, the effects of the COVID-19 pandemic, and companies’ inability to increase revenues, which significantly affected financial stability.

In 2024, corporate insolvencies in Western Europe increased in all countries except Denmark and the UK. The fastest growth was observed in Greece (42.5%), Ireland (32%), and the Netherlands (31.7%). Germany, Austria, Switzerland, and France also experienced double-digit increases, while in Portugal, Norway, and Finland the rise was below the regional average.

In most countries, the number of insolvencies exceeded 2019 levels. In 2024, France accounted for the largest share of Western European corporate insolvencies (34.7%), followed by the UK (13.2%), the Scandinavian countries (12.8%), and Germany (11.6%). Compared to 2019, the shares of France and the UK have increased, while the share of the Scandinavian countries has decreased.

Insolvencies rose across all major sectors. In construction, the increase reached 15.4%, driven by high costs and persistent inflation. In the services sector, growth was 14.2%, reflecting continued weak demand. In trade, the increase was more moderate, indicating gradual stabilization. In manufacturing, insolvencies rose by 9.3%, remaining close to 2019 levels.

In Central and Eastern Europe, 2024 saw an increase in insolvencies in most countries, ranging from 56.7% in Poland to 2.1% in Slovakia. Latvia experienced the second-highest growth, with a 19% increase compared to 2023. Only Bulgaria, the Czech Republic, and especially Hungary saw declines, in Hungary insolvencies fell by 56.2%. Due to the low number of cases in Hungary, the total number of corporate insolvencies in the region decreased to 39 681, significantly lower than nearly 65 000 cases in the previous year, and returning to 2021 levels. In many countries, particularly Lithuania, Latvia, Poland, and Croatia, insolvency figures have not yet reached 2019 levels, indicating partial business stability following the pandemic and economic disruptions.

In Turkey, corporate insolvencies rose by 20.9% in 2024, reaching 32 591 cases, marking the sixth consecutive year of growth. The most significant increase occurred in the trade sector. In comparison, insolvencies in the United States increased by 16.6% to 30 009 cases, but remain below pre-pandemic levels. High interest rates and weak consumer spending continue to weigh on companies.

Considering the close relationship between economic growth and corporate insolvencies, there is a small but justified hope for improvement in 2025. The European Commission has lowered this year’s growth forecast from 1.3% to 0.9%, but concerns about a recession have eased. Forecasts suggest that next year, the increase in insolvencies in Western Europe is likely to be small or may even halt.



The full report is available at the following link: https://www.creditreform.de/aktuelles-wissen/pressemeldungen-fachbeitraege/news-details/show/unternehmensinsolvenzen-in-europa-jahr-2024