German Economy Stalls as 5,000 Companies Go Bankrupt in Q2 2026

Germany is facing a severe economic shock after nearly 5,000 companies were declared bankrupt in the second quarter (Q2) of 2026. This figure marks the highest for a second quarter in two decades.

According to a study from the Halle Institute for Economic Research (IWH) released on Thursday (9/7), 4,996 cases of insolvency were recorded among partnerships and corporations. This number represents a 9% increase compared to the first quarter of the same year.

“This is the highest figure for a second quarter since 2005, when 5,295 bankruptcies were recorded,” the IWH report stated.

This wave of bankruptcies is not only hitting small businesses but also affecting companies in almost all major sectors. The report detailed that the construction, trade, and hospitality industries are suffering the most from the economic downturn.

Data for June 2026 shows an increasingly worrying condition. The number of bankruptcies surged by 20% compared to the same period last year (year-on-year), reaching 1,702 cases. This figure exceeds the average for June in the pre-pandemic period (2016-2019) by a margin of 80%.

Head of IWH Insolvency Research, Steffen Mueller, warned that the situation is serious as it impacts various economic lines in many regions. “In the third quarter (July to the end of September), we must be prepared for a higher increase in bankruptcies compared to last year,” Mueller said.

The spike in bankruptcies in 2026 is a continuation of a negative trend already visible from the previous year. In the first quarter of 2026, Germany also recorded the highest number of bankruptcies in 21 years.

Germany is currently battling economic stagnation that has lasted for three consecutive years. Several key factors are burdening the economy of the European powerhouse, including pressure from cheap imports, which has already led to a reduction in working hours.