The corporate battlefield: Global insolvencies in times of war economics

Executive Summary

• After surging by +10% in 2024, our Global Insolvency index is set to rise by +6% in 2025 and +3% in 2026 as the delayed easing of interest rates and increased uncertainties keep companies under pressure. The number of business insolvencies rebounded in four out of five countries in 2024. The US stood out with a major rise and the Eurozone also posted a noticeable acceleration, particularly in France, Germany and Italy. 
• Rising insolvencies will put 2.3mn jobs directly at risk globally in 2025 (+120k compared to 2024), followed by a marginal rise in 2026 (+20k). We calculate this based on the average number of employees per firm, the share of companies that go into a liquidation phase immediately (72% on average) and the share of people laid off in a restructuring phase (32% on average). 
• If interest rates remain high for longer, the lower availability of credit could lead to even more insolvencies. Access to credit allows firms to refinance liabilities, bridge revenue shortfalls and avoid bankruptcies, particularly during economic downturns. Although we expect interest rates to decline both in Europe and the US, inflationary risks, especially in the US, could slow down the pace of rate cuts.