In Luxembourg, the education, health and social sectors were hit the hardest in 2024. Photo: Shutterstock

In Luxembourg, the education, health and social sectors were hit the hardest in 2024. Photo: Shutterstock

Bankruptcies jumped by 29% in Luxembourg in 2024, a rate three times higher than the global average, according to Allianz Trade’s latest report. The rise is expected to continue in 2025 (+5%) before an expected decline of 8% in 2026.

Allianz Trade unveiled its latest Global Insolvency Report on 18 March 2025. The findings are clear: although the rise in bankruptcies is slowing, it’s continuing on a global scale. After a 10% increase in 2024, the number of insolvencies is set to rise by a further 6% in 2025, then 3% in 2026. If the trade war continues, insolvencies could even climb by 7.8% in 2025 and 8.3% in 2026.

Luxembourg is among the countries hit the hardest. With a 29% increase in bankruptcies in 2024, the country’s rate is almost three times higher than the world average. Europe as a whole is experiencing the same phenomenon: the eurozone is recording an average increase of 19%, driven by Italy (+45%), Germany (+23%) and France (+17%). However, the United Kingdom (-5%), Denmark (-19%) and Hungary (-25%) managed to reverse the trend. Outside Europe, the United States posted an increase of 22%, while Singapore is causing concern with an explosion in bankruptcies (+46%).

Nearly one country in two recorded more bankruptcies in 2024 than at the height of the 2008-2010 financial crisis. This haemorrhage can be explained by three major factors, according to Allianz Trade: the risk of interest rate cuts being postponed, a persistent climate of uncertainty and a weaker-than-expected economic rebound.

The credit insurer also points to the post-Covid-19 effect. Many businesses, particularly SMEs, were artificially kept afloat by public aid granted during the pandemic. The gradual withdrawal of this aid has pushed these weakened structures towards insolvency. Many countries are therefore in the process of ‘catching up’ with bankruptcies that should have occurred earlier.

Sectors under pressure

In Luxembourg, certain sectors are particularly exposed. Education, health and social work have seen a surge in bankruptcies (+65%). Information and communication followed the same trajectory (+50%), while financial activities, real estate and B2B rose by 24%. Industry and construction have not been spared (up 30% and 26% respectively). On a more positive note: transport and storage-related activities are doing well, posting a 25% fall in insolvencies.

Projections for 2025 remain in the red, with a further 5% increase in the number of bankruptcies in Luxembourg (below the world average), taking the total to 1,250 businesses in difficulty, compared with 1,189 in 2024. However, according to the study, an upturn could be in the offing by 2026, with an anticipated drop of -8%, bringing the number of bankruptcies down to 1,150.

This article in French.