The economic damage caused by the Covid-19 pandemic will tip as many as 29,000 German companies into insolvency this year, an increase of more than 50% from 2019, according to research published Monday.

Travel, restaurant and event sectors will be hardest hit, according to the study by Hamburg-based business information company Crif Burgel, which assumes a recession of similar scope to the 2009 financial crisis in its calculations.

The pandemic has already forced restaurant chain Vapiano SE and department store group Galeria Karstad Kaufhof to seek court help last month after sales plunged due to the lockdown. Airline Deutsche Lufthansa AG is also considering insolvency as an alternative to accepting strict bailout conditions from the German government.

The estimates aren’t taking into account state-backed loans to help companies weather the Covid-19 crisis, which could reduce the total number of insolvencies.

“This raises the question of how even previously successful companies that generated little profit and rather low cash reserves due to their business model will be able to pay off additional loans,” Crif Burgel said.

Source: Bloomberg News