Allianz Trade has forecasted a 3% rise in business insolvencies across Asia in 2024, a figure that could escalate to 8% when excluding China. This follows a global trend, with worldwide business insolvencies expected to jump by 11% after a 7% increase in 2023.
In contrast to the regional trend, certain countries—including India, Taiwan, South Africa, and Turkey—are anticipated to experience declines in insolvencies, with Turkey facing the most significant drop at 43%. However, these exceptions contribute minimally to the global GDP, thus exerting limited influence on the overall insolvency landscape.
North America is predicted to encounter the steepest increase in insolvencies, soaring by 32% year-over-year. This is followed by Western Europe at 14%, Latin America at 11%, and Central and Eastern Europe at 8%. The projected global rise is attributed to widespread increases across various regions and sectors, with two-thirds of countries likely to exceed pre-pandemic insolvency levels, notably in the UK and France.
The Global Insolvency Index is expected to conclude 2024 between 10% and 15% above the averages recorded from 2016 to 2019, although it will remain 11% below the peaks observed during the Great Financial Crisis. This surge is partially driven by a backlog of insolvencies from businesses previously shielded by pandemic-related support measures.
Sectors such as construction, retail, and services are experiencing the largest spikes in insolvencies, particularly among large businesses with turnovers exceeding $54.46 million (EUR 50 million), which are hitting record bankruptcy levels in the second quarter of 2024 in Western Europe.
Looking forward, insolvencies are anticipated to increase by an additional 2% in 2025 due to sluggish growth, ongoing geopolitical tensions, and a gradual easing of financing conditions.
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