A recent report from Allianz Trade paints a worrying picture for businesses worldwide, forecasting a significant rise in global corporate bankruptcies throughout 2024. The study predicts a sharp 11% increase in business failures, followed by a further 2% hike in 2025 before seeing a gradual stabilization in 2026. The report highlights varied regional dynamics, with major repercussions for employment and business stability, particularly in sectors such as construction, retail, and services.
A global shock: Over half of the world’s GDP at risk
Allianz Trade estimates that in 2024, more than half of the global GDP will be impacted by double-digit increases in corporate failures. Economic demand remains weak, geopolitical tensions are high, and financial conditions vary greatly from region to region. Adding to the strain is the phasing out of the COVID-19 pandemic and energy crisis relief measures, which had previously helped curb bankruptcy rates.
Job market threatened: 1.6 million jobs at risk by 2025
The impact of this corporate crisis extends far beyond businesses alone. The report warns that in Europe and North America, nearly 1.6 million jobs could be at risk by 2025. This mounting pressure weighs most heavily on fragile industries, particularly construction, retail, and services. These sectors are especially vulnerable to the increasing frequency and severity of business failures.
Morocco’s critical situation: Record business failures expected
Morocco, already facing significant economic challenges, is expected to see a record number of business failures in 2024, with over 16,000 cases projected—a 13% increase compared to 2023. This figure surpasses even the levels seen during the 2008 financial crisis. Allianz Trade suggests that Moroccan companies will continue to struggle with delayed payments and tax pressures, making it unlikely for the country to see any relief before 2026.
Varied outlooks across regions and countries
The Allianz Trade projections reveal differing trends depending on the region. In the United States, business failures are expected to rise by 12% in 2025, followed by a 4% drop in 2026. Europe, however, presents a more mixed picture. Germany is likely to see a 4% rise in bankruptcies in 2025 before a decline the following year. France and the UK are expected to experience only a slight moderation, while Italy and China are forecast to face a continued rise in failures.
Can lower interest rates bring relief?
A much-anticipated monetary easing, with rates expected to drop by 2 percentage points by September 2025, may provide a bit of breathing room for businesses by lowering borrowing costs and boosting profitability. In France, corporate profitability could rise by 4 percentage points, and by 2.8 percentage points in the U.S. However, Allianz Trade warns that this rate reduction, while significant, won’t be enough to reverse the overall trend of rising failures, especially in the U.S.
Stabilization of business failures expected by 2026
While monetary policy easing is expected to bring gradual improvements, global business failures aren’t forecast to stabilize until 2026. In the meantime, companies must navigate an uncertain economic landscape, characterized by weak demand and ongoing geopolitical tensions.
The situation underscores the need for both businesses and governments to adopt resilient strategies in the face of a wave of bankruptcies that could reshape the global economy in the coming years.
