According to an analysis conducted by the credit information provider CRIF, the effects of the energy crisis and problems with supply chains have put ten percent of German companies at an increased risk of insolvency at the present time. CRIF also predicts that the number of companies declaring bankruptcy will increase both this year and next year. According to Frank Schlein, the managing director of CRIF Germany, “problems are being caused for many companies as a result of high energy costs, existing problems in supply chains, and inflation.” “In addition to this, consumers are showing less willingness to spend money because they have less money available to them as a result of rising energy prices and inflation,” According to CRIF, the danger lies primarily within energy-intensive industries.
“This includes the ceramics and glass industry, paper manufacturers, as well as the transportation and logistics sector,” the author writes, “in addition to the bakeries that are so often mentioned.” According to the report, many businesses that specialize in skilled crafts and trades, the catering industry, the production of beverages, and hairdressing salons are also experiencing problems. The Canadian Real Estate Investment Foundation (CRIF) forecasts that the number of businesses declaring bankruptcy will pick up marginally this year before seeing a more significant increase in 2023. It predicted that there would be 14,500 bankruptcies of companies in 2022, which is an increase of almost four percent, and 17,000 in 2023, which is an increase of seventeen percent.
For the purpose of the study, CRIF investigated the creditworthiness as well as the financial strength of nearly 3 million businesses. It was discovered that more than 300,000 are currently experiencing financial problems, which is an increase of almost 16 percent compared to the month of March. In the wake of Russia’s war in Ukraine, which also drove overall inflation to multi-decade highs, the German government has enacted a series of relief measures for consumers and businesses to cushion the blow from rising energy costs. These measures were passed by the German government.