Allianz Trade warns of increasing business failures worldwide

Allianz Trade has updated its forecasts for global corporate insolvencies, predicting an increase of 11% in 2024, followed by an increase of 2% in 2025, according to the Global Insolvency Report.

The firm expects insolvency levels to remain high through 2026, reflecting the ongoing challenges facing businesses around the world amid weak economic demand, environmental risks and other factors. of finance.

Why did Allianz Trade improve its global trade forecast?

These new estimates show a stronger outlook than previously predicted. Allianz Trade had previously predicted a rise of 9% in 2024, but the latest changes led to a double-digit improvement.

The report also adjusted the expected increase in 2025 from flat growth to an increase of 2%, with an expected stability until 2026.

Global corporate insolvency forecast by region

Estimates of insolvency will vary by region.

In the United States, an increase of 12% is expected in 2025, followed by a decline of 4% the following year. In Germany, debt is expected to rise by 4% before falling by 4% in 2026.

Meanwhile, France and the UK are expected to see a modest decline of 6% in 2025, and a further decline in 2026. On the other hand, Italy is set to see a continued increase, while the failure of business in China will rise from low levels, with a profit of 5. % and 6% in 2025 and 2026, respectively.

Annual data shows that global pollution has increased by 9%, with high levels affecting many regions and sectors.

Allianz Trade’s 2024 global insolvency index is expected to be 13% higher than the 2016-2019 average, although it is still 11% below the peak seen during the Global Financial Crisis.

He noted that the termination of the support measures introduced during the epidemic and the energy crisis has left some companies at risk, especially in sectors such as construction, shops and services.

“That’s why countries responsible for more than half of the world’s GDP will be affected by double-digit growth in 2024, and two-thirds may exceed their pre-pandemic figure this year,” Coqui said.

In addition, debt levels have reached record highs, especially in Western Europe.

This trend poses a major threat to employment, and Allianz Trade suggests that more than 1.6 million jobs could be at risk in Europe and North America by 2025. This represents 8% of the total number of unemployed, with sectors such as construction, retail, and services highly exposed.

Low interest rates expected to provide relief to businesses

Allianz Trade says lower interest rates can help businesses by reducing borrowing costs and improving cash flow. However, it warns that simply cutting costs is not enough to solve the financial problems that many companies are facing.

Maxime Lemerle, an insolvency research analyst at Allianz Trade, noted that businesses are already adapting to higher standards.

He explained that although the expected reduction in rates – by 2 percent in September 2025 – could reduce the insolvency process by 4 percent, this will partially reduce the overall rise in US debt and strengthen down in other places like France.