The scale of corporate insolvencies around the world is increasing. Poland is at the top of the infamous list

Luc Williams

In its latest Global Insolvency Report, Allianz Trade presents a more negative forecast for the global business landscape than previously anticipated. AT economists estimate that there will be an 11% increase in 2024. an increase in the number of companies that will become insolvent.

The authors of the report emphasize that threats to businesses around the world are increasing as the global economy struggles with weak demand, ongoing geopolitical tensions and uneven financing conditions.

The report shows that the growth dynamics will slowly slow down, but in 2025 it will increase by 2%. companies that will run into financial difficulties. In 2026, the number insolvent companies will be similar to the previous year.

The situation of the world economy favors insolvency

Allianz Trade economists point to several reasons that increase financial risks in the global economy.

Among them, they say that over 1.6 million jobs in Europe and North America are at risk in 2025.

“Easing monetary policy (-2 percentage points by September 2025) should contribute to reducing the insolvency trend, especially in France and the United States (by -4 percentage points) by increasing the profitability of enterprises (+4 percentage points and respectively +2.8 percentage points)” – we read in the report

In 2024, more than half of the global economy (in terms of GDP) is facing double-digit growth insolvent enterprises.

Polish companies in a poor financial situation

As we read in the report, 2024 is expected to be the fifth consecutive year of increase in the number of insolvencies of Polish companies. This indicator is expected to increase by 381% compared to 2019, which – according to the report – is to be the largest increase in this period in the world.

Next year there will be a “likely” decline of 11%. on an annual basis.

As the authors of the report comment, the phenomenon of increasing insolvency in Poland is not evenly distributed among industries. The fastest growth is in transport and construction, while it is falling in services. Nevertheless, according to Sławomir Bąk, member of the management board of Allianz Trade in Poland, it is not the economic situation in a given industry that determines the scale of the phenomenon.

– The most important thing on a whole scale Polish economy low margins are the result of the coexistence of factors such as: high costs (labor, energy), slowdown in demand, high financial costs, no prospects for quick positive changes in these factors – explains the expert.

He adds that the insolvencies of Polish companies – and the fact that their number is growing for the fifth year in a row – are the result of cyclical external factors (the war affecting energy prices) or the effect of structural changes (shrinking labor market, industrial competition for the EU from China).

– Moreover, they are also real stress test quality of management and vision of managers of Polish companies. And this challenge is not going away anytime soon. We do not expect the multi-faceted variability of the business environment in which companies currently operate to decrease, warns Bąk.

About LUC WILLIAMS

Luc's expertise lies in assisting students from a myriad of disciplines to refine and enhance their thesis work with clarity and impact. His methodical approach and the knack for simplifying complex information make him an invaluable ally for any thesis writer.