German firms more and more struggling to entry credit score

BERLIN (Reuters) – Round one in 4 German firms at the moment searching for new loans are reporting restraint from lenders as excessive inflation and issues over power provide rattle Europe’s largest economic system, in keeping with a survey revealed on Monday.

The determine – 24.3% – is the best seen since 2017, mentioned the Ifo institute, which carried out the survey.

“The tough financial local weather is at the moment making banks extra cautious,” mentioned Klaus Wohlrabe, Ifo’s head of surveys.

“With out new loans, some firms may wrestle for financial survival,” he added.

As many as 28.8% of firms searching for credit score within the companies sector reported difficulties, round 8.4% of chemical firms and 22.5% automakers, Ifo mentioned. In retail, the determine was 15%.

The smallest companies and the solo self-employed had been most affected as a result of their dependency on financial institution loans, in keeping with the institute.

Germany is headed for recession because the power standoff with Russia, rising costs and provide bottlenecks take their toll, with the federal government forecasting a contraction of 0.4% subsequent 12 months. (This story has been corrected to repair paragraph 5 to learn 8.4% of chemical compounds firms and 22.5% of automakers searching for credit score are having difficulties, not 35% for each, after Ifo corrected its assertion)