German business insolvencies surged by 12.2% in the first half of 2025 compared to the same period a year earlier, according to the federal statistics office. The rise highlights the economic challenges facing Chancellor Friedrich Merz’s government as it struggles to reignite growth.
Final figures showed that local courts recorded 12,009 insolvencies between January and June. Volker Treier, chief analyst at the German Chamber of Commerce (DIHK), warned that the crisis is draining jobs, productivity, and entrepreneurial strength. After two consecutive years of economic contraction, many firms are under severe liquidity pressure.
The DIHK expects more than 22,000 insolvencies this year, compared with 21,812 in 2024 — the highest number since 2015. Creditors’ claims in the first half of 2025 totaled €28.2 billion ($32.97 billion), down from €32.4 billion a year earlier. Officials explained that the decline reflects fewer large companies filing for insolvency this year compared to the first half of 2024.
Germany’s economy continues to face strong headwinds. GDP shrank again in the second quarter, while exporters are struggling with the effects of new U.S. tariffs. Preliminary data also shows insolvencies in August rising 11.6% year-on-year.
The statistics office noted that insolvency numbers are provisional, as many procedures are filed months in advance and only counted after court approval. Early indicators suggest a further uptick in September and persistently high levels in October. However, Steffen Mueller, head of insolvency research at IWH, expects the impact on the labor market to remain moderate despite the high insolvency rate.
Adding to the gloomy outlook, German unemployment has climbed to three million for the first time in ten years.
