Allianz Trade: Global Business Insolvencies to Continue Rising in 2025-2026
Allianz Trade predicts global business insolvencies will increase by 6% in 2025 and 3% in 2026, following a 10% rise in 2024. Elevated interest rates and uncertainty are key drivers.
Global business insolvencies are projected to continue their upward trend over the next two years, according to Allianz Trade's latest Global Insolvency Report. After a 10% increase in 2024, the trade credit insurer forecasts a 6% rise in 2025 and a further 3% increase in 2026. This marks five consecutive years of rising insolvencies, from 2022 to 2026.
The ongoing increase is attributed to several factors, including the risk of delayed interest rate easing, prolonged uncertainty in the business environment, and a slow rebound in demand. Persistently high borrowing costs could strain highly leveraged companies and sectors facing financing challenges, such as transportation and construction.
In 2024, business insolvencies rose in four out of five countries, with many advanced economies starting 2025 with insolvency levels well above pre-pandemic figures. Last year also saw 474 large companies globally declare bankruptcy, raising concerns about potential domino effects on suppliers and subcontractors.
Allianz Trade warns that interest rates remaining higher than expected and the potential for a trade war could further deteriorate the outlook. A tightening credit environment and increased borrowing costs would amplify default risks for businesses. Geopolitical tensions and instability add further complexity and volatility to the corporate landscape.