In terms of corporate bankruptcies, 2024 is a record year: never before have debts among bankrupt companies been so high. While debts were already higher than ever before at 14 billion in 2023, this year they rose again by no less than 30.8 percent to 18.3 billion euros. The prospects for 2025 are also bleak.
The 18.3 billion debts of companies that have gone bankrupt represent the highest value in “our economic history”, said Karl-Heinz Götze, head of the insolvency department of the credit protection association KSV1870.
According to the KSV forecast, 6,550 companies will probably have gone bankrupt by the end of the year. Götze: “That is an increase of about 22 percent compared to last year and an increase of 30 percent compared to the pre-Corona year 2019.” According to the figures, there were only more business bankruptcies in 2015 and 2018.
The largest bankruptcy was Fisker
The largest bankruptcy was Graz-based Fisker GmbH, a subsidiary of the American electric vehicle manufacturer, with debts of almost 3.8 billion euros (see chart). “Then the bankruptcies were controlled by Signa and the circle around René Benko – as a sole proprietorship or through the private foundation,” says Götze. “After that, KTM came with 1.8 billion euros if we only look at the AG. Including the two other companies, we would have two billion euros in debt at KTM.”
Ricardo-José Vybiral, head of the KSV1870 group, also presented the current situation of the companies. “Only 48 percent say the business situation is very good to good.” This is the lowest value since the Corona year 2020. The expert is mainly concerned about the industry. Only 46 percent of companies report a good to very good business situation, and one in five expects losses this year. Vybiral: “If the industry in our country collapses, we will have a problem. And we see a gradual deindustrialization in Austria.”
By 2025, there will probably be 6,500 to 7,000 bankruptcies
But things are also going badly for restaurant owners, who suffer from a lack of staff and the fact that guests come but spend less. The picture is similar in retail, where the consequences of people’s unwillingness to consume are being felt. But the business situation in construction remains difficult, especially in the construction sector.
In any case, the prospects are bleak. Götze assumes that there will be 6,500 to 7,000 bankruptcies in 2025. According to Vybiral, it is important that a new government is established quickly that provides incentives to stimulate the economy: “What we urgently need is optimism for the future. The companies have clearly told us what they expect from politicians. I don’t think there will be any major tax cuts. But I believe there is a lot that can be done on the regulatory front to make it easier for companies to focus on business.”
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
