We released our latest annual insolvency report for Central and Eastern Europe (CEE), revealing a paradoxical picture. Despite a return to economic growth in 2024, the financial stability of companies in the region continued to decline. While macroeconomic indicators pointed to recovery, insolvency rates remained high or even increased in many CEE countries, highlighting deep-rooted structural vulnerabilities.
In 2024, average GDP growth in CEE reached 2.6%, compared to just 0.8% in 2023. This rebound was driven by lower inflation, rising real wages, and strong household consumption, particularly in Poland, Hungary, and Romania. Inflation dropped from 11.2% in 2023 to 4.6% in 2024, thanks to lower energy prices and improved supply chain conditions.
However, this macroeconomic upswing did not result in stronger business resilience. Officially, insolvencies fell by 9%, from 50,248 in 2023 to 45,938 in 2024. But this apparent improvement is misleading, driven largely by regulatory changes in Hungary, where judicial reforms led to an abnormal spike in 2022, now corrected.
Real Insolvency Growth When Excluding Hungary
Once Hungary is excluded, the number of insolvencies across the region actually rose from 29,771 to 30,680 in 2024, a 3% increase. This indicates a persistent fragility among CEE businesses.
“After the turbulence of 2023, macroeconomic indicators hinted at recovery,” explains Mateusz Dadej, Regional Economist at Coface CEE. “Yet many companies—especially in manufacturing and transport—had already absorbed too many shocks.”
The increase in insolvencies reflects both delayed impacts of previous crises and ongoing structural weaknesses.
Country-by-Country Insolvency Dynamics
The insolvency trends in 2024 were uneven across the region:
- Hungary saw the largest decrease (–25.5%), due to the normalization of court procedures.
- Serbia (–12.1%) and Bulgaria (–5.7%) also saw fewer cases thanks to improved macro conditions.
However, insolvencies increased significantly in:
- Slovenia (+32.4%)
- Latvia (+24.6%)
- Estonia (+10.2%)
- Croatia (+7.3%)
These increases were driven by weak domestic demand, rising costs, and sector-specific challenges, especially in construction and retail.
Romania recorded a 9.4% increase, notably among medium and large companies, due to high inflation and fiscal imbalances.
Poland saw a 19% rise, linked to the widespread use of pandemic-era restructuring procedures, now commonly used to manage liquidity issues.
Other countries saw more stable trends:
- Czech Republic: +1.9%
- Slovakia: –3.5%
- Lithuania: –1% (with insolvencies mostly in construction and retail)
Key Sectors Under Strain: Transport, Manufacturing, Construction
Several critical industries faced notable stress:
- Transport: challenged by falling freight volumes and cost pressure.
- Manufacturing: faced declining orders and labor shortages.
- Construction: suffered from rising interest rates and falling residential investment.
These sectors showed above-average insolvency growth, putting further pressure on employment and regional economies.
Outlook for 2025: Cautious Optimism with Risks
“We expect a modest improvement in 2025,” says Mateusz Dadej. “The release of delayed EU funds and consumption recovery will be crucial.”
Still, there are significant downside risks:
- Tight credit conditions
- Ongoing geopolitical uncertainty, particularly the escalating trade tensions between the US and EU
Conclusion: Long-Term Stability Requires Structural Reform
According to Jarek Jaworski, Regional CEO of Coface CEE, the report highlights the need for sustainable investmentand clear policy direction. Although growth has returned, many businesses remain vulnerable. A coordinated policy effort—both nationally and at the EU level—is essential for stabilizing the business landscape in CEE.