ifo Dresden: Number of Companies in Eastern Germany Threatened with Insolvency Down by Half
Despite the Russian attack on Ukraine, significantly fewer eastern German companies fear for their survival. In a survey conducted by the ifo Institute in April 2022, 6.2 percent of respondents felt that their survival was threatened. This is half the rate from the previous survey in January 2022 (13.9 percent). “This is encouraging news. Removing coronavirus restrictions helps businesses. At the same time, the Russian attack on Ukraine and the associated economic upheaval don’t seem to be threatening the survival of companies at the moment,” says Joachim Ragnitz, Managing Director of the ifo Institute’s Dresden Branch.
In eastern German manufacturing, though, companies are hardly less worried than they were, with 7.8 percent of companies reporting that they fear for their survival (January: 9.9 percent). “Some companies are likely being hit hard by the effects of war,” Ragnitz says. “Imports of Russian gas and oil have traditionally played a major role in eastern German industry.” The refineries in Schwedt/Oder and Leuna get their oil mainly from Russia and supply fuels for all of eastern Germany.
In the service sector and in trade, the number of companies that feel their survival is threatened declined more noticeably. This is likely due first and foremost to the easing of the pandemic and the lifting of government restrictions.
