Germany’s stagnating economy has been hit particularly hard by rising energy costs and tightening financial conditions. In 2025, insolvencies experienced their third consecutive year of double-digit increases and are unlikely to recover in 2026, creating a situation that poses a major risk for Switzerland.
Insolvencies in Germany rose for the fourth consecutive year in 2025, reaching their highest level since 2014. As the situation will be exacerbated by the conflict with Iran, there are direct risks for the Swiss economy. Recent data from the Federal Statistical Office shows that insolvencies rose by 10 per cent last year, following increases of 22 per cent in both 2023 and 2024. The hardest hit industries were construction, retail and wholesale trade, and hospitality. Proportionally, in terms of sector size, the transport and storage sector was the most vulnerable in 2025.
Iran conflict dampens positive momentum
Under different circumstances, the simultaneous decline in major bankruptcies and the resulting expected losses could have been taken as a positive sign. A wide-ranging government support package had also brightened the outlook at the start of the year. But the war in Iran has drastically counterbalanced the situation: rising energy costs are clouding the future of German industry.
Access to capital becoming more difficult
Access to capital is expected to become more challenging for companies. Price hikes could fuel inflation and prompt the European Central Bank (ECB) to raise its key interest rate. Banks had already been continuously tightening their lending criteria since 2023, which has particularly affected large corporations. Analysts expect the Bank Lending Survey (BLS) due at the end of April to report further restrictions, making it harder for businesses and households to access credit. This trend comes amid falling profits for the 40 largest listed companies in Germany (DAX), which have published their results for 2025 in recent weeks. Their inflation-adjusted profits have dropped by 25 per cent compared to 2021.
The model economic of Germany loses its relevance
In light of the conflict with Iran, analysts believe Germany is more than ever facing an economic model that no longer works. Until now, this was based on two pillars: on the one hand, cheap access to Russian fossil fuels (now lost); on the other, massive exports to China and the US, which even saw a double-digit decline in 2025. No real growth has been observed since the Covid-19 crisis.
Given this, the rise in energy prices appears all the more problematic. Germany’s gross domestic product (GDP) depends on industry by 20 per cent, particularly on a large proportion of energy-related sectors. Analysts emphasize that this factor makes Germany, along with Italy, one of the most exposed countries in Western Europe. The country remains vulnerable due to its reliance on hydrocarbons, which still account for 40% of its electricity mix.
Provided that the Strait of Hormuz reopens soon, the analysis indicates that the GDP should grow by 0.8 per cent, 0.2 percentage points lower than expected. Regarding inflation, a 0.4 percentage point increase to 2.4 per cent is expected.
Impact on Switzerland
The evolution of the situation in Germany is crucial for the Swiss economy. Coface’s Chief Economist for the DACH region highlights that in 2025, 15 per cent of all imports came from Germany, while 11 per cent of all exports were destined for this neighbor. In comparison, the US accounts for 15 per cent of these figures.
Furthermore, Switzerland is currently facing its own difficulties. Last year, bankruptcies jumped by 50 per cent. Even if this increase is explained by a change in legislation (LP/SchKG), the figure of 9,300 failures is remarkably high compared to the 24,000 recorded in Germany, a much larger country.
Swiss companies must also contend with higher prices for fossil fuels; the country’s consumers and the export-oriented economy are destabilized by the geopolitical situation. Although a hike in interest rates seems unlikely in Switzerland according to Markus Kuger, the country is nonetheless affected by potential inflation and rising interest rates in the euro zone (2.5% in March). Until now, Swiss companies could rely on the excellent payment morale of their German partners, but according to our 2025 Payment Study, this is deteriorating.
In 2026, Swiss companies should pay more attention to payment patterns of Germany-based enterprises and secure their receivables to navigate this context of heightened risk.
emphasizes Markus Kuger.
