Allianz Trade forecasts a global rise in business insolvencies of 11% for 2024, building on a 7% increase in 2023. In Asia, insolvencies are anticipated to grow by 3%, with the figure climbing to 8% when excluding China.
While several countries, including India, Taiwan, South Africa, and Turkey, are expected to see declines in insolvencies—Turkey facing the steepest drop at 43%—these exceptions account for a minor share of global GDP, thus exerting limited influence on the overall trend.
North America is projected to experience the most significant increase, with a staggering 32% rise in insolvencies year-over-year. This is followed by Western Europe at 14%, Latin America at 11%, and Central and Eastern Europe at 8%.
The anticipated global rise is attributed to widespread increases across various regions and sectors. Notably, two-thirds of countries are expected to exceed pre-pandemic insolvency levels, particularly in the UK and France. The Global Insolvency Index is set to finish 2024 between 10% and 15% above the 2016-2019 average but will remain 11% below the peaks seen during the Great Financial Crisis.
This surge is partially driven by a backlog of insolvencies from businesses that benefited from pandemic and energy crisis support measures. The construction, retail, and services sectors have experienced the most significant increases in insolvencies, with large businesses—those generating over $54.46 million (EUR 50 million) in turnover—reaching unprecedented bankruptcy levels in Q2 2024, particularly in Western Europe.
Looking ahead, insolvencies are expected to rise by an additional 2% in 2025 due to sluggish growth, ongoing geopolitical tensions, and a slow easing of financing conditions.
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