The wave of global bankruptcies continues in 2025 and 2026

According to our latest Global Insolvency Report, the number of global bankruptcies will continue to rise over the next two years: after +10% in 2024, they should increase by +6% in 2025 and +3% in 2026. This would translate into 5 consecutive years of increasing bankruptcies (2022 - 2026).

Belgium has already set a 10-year record for bankruptcies in 2024, with just over 11,000 cases (+8%), so close to the all-time record of 2013 (11,740). This increase is linked to a further notable rise in construction (+17%), trade (+12%) and transport/logistics (+12%), but also to signs of stabilization for real estate, B2C services and hotels. "We believe that the gradual improvement in economic dynamics and financing conditions will remain too weak in 2025 to enable a significant reversal in the bankruptcy trend before 2026. However, we expect a gradual return to the 2016-2019 average by the end of 2026, after 10,560 cases in 2025 and fewer than 10,000 cases in 2026," says Johan Geeroms, our Risk Underwriting Benelux Director.

Add to this the fact that 25% U.S. tariffs will cut economic growth in Belgium in half, and that Belgian companies, which are primarily export-oriented, will see their share of world trade fall even further, partly due to high labor and energy costs.

Looking ahead, we forecast a further increase in global bankruptcies in 2025 and 2026, giving 5 consecutive years of rising bankruptcies (2022 - 2026).

"We expect global bankruptcies to rise by +6% in 2025 and +3% in 2026. This upward revision is explained by the risk of interest rate cuts being postponed, heightened uncertainty and weak demand. Relatively high interest rates could put pressure on highly indebted sectors and companies, as well as those facing specific financing challenges - such as the green transition, competition from AI or supply chain frictions. At the same time, persistent uncertainty can leave companies in a state of limbo, leading to a reduction in activity to the detriment of already vulnerable businesses. Other risk factors include the continuing lack of economic dynamism and the clearing of the backlog of bankruptcies following the Covid affair. The business environment has rarely been so complex and volatile, and companies must remain vigilant to avoid the risk of bankruptcy", explained Aylin Somersan Coqui, CEO of Allianz Trade.

Increased credit can help reduce the number of bankruptcies by providing businesses with the liquidity they need to meet their debts, continue operating and invest in growth. Access to credit enables businesses to refinance their debts, make up for lost income and avoid bankruptcy, particularly during economic recessions. Although interest rates are expected to fall in Europe and the US, inflationary risks, particularly in the US, could threaten interest rate cuts. If borrowing costs rise and credit becomes less accessible, this could lead to slower credit growth, tighter financial conditions and a higher risk of default for highly indebted companies. According to our estimates, a 1% fall in credit will lead to an increase in insolvencies over the next 3 months of around +3% in the USA, +0.4% in Germany, +1% in the UK and 2% in France.

But according to our report, the main upside risk is the looming trade war. "Our bankruptcy outlook could deteriorate if the European economy underperforms, with a greater lack of momentum, or if APAC's resilience is weaker and China's headwinds greater, as well as if the outlook for the US deteriorates further. Geopolitics could also be a major factor in turbulence, with ongoing conflicts in Russia-Ukraine and the Middle East, tensions in the South China Sea and political uncertainties regarding Taiwan. A widespread trade war would increase our bankruptcy forecasts by a further +2.1pp and +4.8pp, meaning that global bankruptcies would rise by +7.8% and +8.3% in 2025 and 2026, respectively. For 2025-2026, this would equate to +6,800 additional cases in the US and +9,100 in Western Europe," concludes Maxime Lemerle, Lead Analyst for Insolvency Research at Allianz Trade.