The number of companies in Germany filing for bankruptcy has unexpectedly jumped to its highest value since at least 2018.
According to data from the German Federal Statistical Office (StBA) published on August 11, the agency’s insolvency index rose by almost 20 per cent compared to June, the most since since autumn of 2024.
According to think-tank IWH a total of 1,588 German companies filed for bankruptcy in July 2025. “The number of corporate insolvencies that month reached a level that – apart from the record in April 2025 – was the highest in 20 years,” IWH researchers said on August 7.
The methodologies of the StBA and IWH bankruptcy indices differ slightly. The core message of the recent numbers, though, were the same, crushing hopes for a quick recovery of the ailing German economy.
After the number of insolvencies had fallen for the first time since March 2023 in May of this year, economists had been cautiously optimistic. Already in June, though, bankruptcy indicators had been on the rise again, with the July numbers now confirming the trend.
For the entire year 2025, forecasters said they expected another rise in bankruptcy cases compared to 2024 – which had already seen the highest number of insolvencies since 2015, with 21,812 cases.
The bad July numbers still offered some consolation, according to IWH researcher Steffen Müller. As there were few large-scale bankruptcies, the effect of the rise in insolvencies was not too severe for the job market, which already counts almost 3 million unemployed, he said
Furthermore, the numbers may have been slightly higher because July offered the maximum number of open days for the insolvency courts as it was a longer month without any public holidays.
The latest data, though, also showed a worrying increase in several indicators, which may foreshadow a further rise in bankruptcies in the coming two to three months, experts said.
The bad economic data has also been driving criticism of the government of German Chancellor Friedrich Merz that took office in May 2025 with the stated goal of revitalising the country’s economy.
That hope now appeared gone, especially within the small and medium enterprise sector that forms the backbone of the German economy.
The Association of Family Entrepreneurs – a lobbying group that represents more than 6,500 German companies – has demanded a “comprehensive change of course” from Merz and his ilk, writing on X on August 9: “The promise of an economic turnaround has not been fulfilled so far.”
