In 2024, the German current account surplus increased slightly by ¼ percentage point to 5¾% of nominal gross domestic product (GDP). It thus remained below the peaks of previous years. Exports decreased, even though sales markets expanded. At the same time, demand for imports remained weak, as investment was on a moderate path. All in all, though, the sub-balances of the current account in 2024 were little changed against the previous year. The balance of trade in goods was virtually unchanged, and the deficit in the services account widened slightly but was more than offset by higher balances for primary and secondary income. In line with the current account balance, the balance of savings and investment (aggregate net lending/net borrowing) was also virtually unchanged. Enterprises saved less as higher staff costs reduced their profits. At the same time, investment was dampened by weak demand as well as structural and cyclical factors. High financing and construction costs were also a drag on housing investment. Households increased their savings, as their consumption remained subdued despite rising real incomes. The general government deficit widened slightly, mainly as a result of one-off tax refunds. 

In keeping with the slightly increased current account surplus, the financial account also closed with a somewhat higher balance in 2024 than in the previous year. There were two factors driving developments in its sub-accounts: first, the ongoing cyclical weakness in Germany, also when compared to other countries. This was reflected in further declining direct investment flows and rising net capital exports of mutual fund shares and stocks. The second factor was the final stop to Eurosystem asset purchases, coupled with slightly looser (albeit still restrictive) monetary policy. One of the outcomes of this combination was a smaller scarcity premium for German Federal bonds. Accordingly, foreign investors significantly increased their holdings of these securities, which are deemed to be particularly safe. The strong demand for German debt securities from other European countries also meant that the German TARGET balance did not fall as sharply as would actually have been expected given the maturing asset purchases of the Eurosystem.

The German current account surplus increased slightly in 2024. It rose by €14 billion to €246½ billion. The balance increased by ¼ percentage point to 5¾% of nominal GDP. The surplus thus remained high, but is still well below its peaks prior to the outbreak of war in Ukraine and the coronavirus pandemic.

The sub-balances of the current account changed only marginally in 2024. The goods trade balance remained broadly stable, since exports contracted despite growing sales markets and imports declined as a result of subdued investment. The deficit in the services account widened marginally, but was more than offset by slight increases in the balances of primary and secondary income. All in all, the sub-balances of the current account in 2024 were little changed against the previous year.

The global setting remained subdued in 2024. Growth in the global economy was stable but below average. Central banks’ tight monetary policy led to a drop in inflation rates in many countries. However, demand continued to suffer given higher financing costs, and fiscal support measures were phased out. According to CPB Netherlands Bureau for Economic Policy Analysis, the volume of global trade grew moderately by 1¾%, having declined in the previous year. The euro appreciated marginally in 2024, which put a slight damper on Germany’s price competitiveness. Global market prices for commodities, particularly natural gas and other energy imports, continued to decline slightly, but on average remained above the long-term average.

The value of the foreign trade surplus rose slightly in 2024, mainly due to price effects. Import prices for commodities, especially energy, fell slightly, whilst export prices remained broadly stable. This led to a marginal year-on-year improvement in Germany’s terms of trade. In terms of volume, by contrast, the balance barely changed. Real imports and real exports both decreased by more or less the same amount. 

In regional terms, the current account surplus vis-à-vis non-euro area countries increased. It went up by ¼ percentage point to 3¼% of GDP. This was mainly because of larger surpluses in primary income. By contrast, the current account surplus vis-à-vis euro area countries remained virtually unchanged, at 2½% of GDP. Germany recorded the largest current account surpluses vis-à-vis the United States, France and the United Kingdom (see the supplementary information on Germany’s current account surplus vis-à-vis the United States.

In the year under review, aggregate net lending/net borrowing (the balance of saving and investment) remained broadly unchanged relative to GDP. 1 Looking beyond that, however, there were opposing developments in the individual sector accounts. Non-financial corporations’ savings declined significantly, particularly owing to higher staff costs. At the same time, net investment relative to GDP decreased, but not as much as savings. On the one hand, the ongoing weakness of the export industry and subdued domestic demand were a hindrance. On the other hand, structural factors depressed investment. In addition, housing investment continued to decline, pushed down by high financing and construction costs. Households significantly increased their savings as private consumption remained subdued in spite of rising real incomes. Political and economic uncertainties as well as the gloomier labour market situation dampened the propensity to consume. The general government funding deficit widened marginally. Even though the energy price brakes were no longer in place, the deficit ratio remained virtually unchanged due to the countervailing effect of higher spending on defence, climate action, personnel, interest and social security schemes.

Price-adjusted foreign trade weakened again on an annual average. Goods exports and imports both declined (by 1½% and 1¾% respectively) in line with the persistent weakness of the economy. Nominal exports fell almost as sharply as price-adjusted exports. Imports saw a noticeably steeper decline in terms of value than in real terms because the prices of intermediate goods and, in particular, of energy products fell. On balance, the foreign trade surplus increased by €21½ billion to €239 billion.

In regional terms, the German export industry recorded marked revenue losses in exports to the euro area, while deliveries to third countries declined only slightly overall. Meanwhile, exports to Germany’s most significant trading partners within the euro area fell significantly. In contrast to this, exports to other important sales markets in Europe and to the United States saw a marked expansion. Deliveries to Japan were also up strongly. Exports to Ukraine increased considerably, which was attributable to goods delivered in connection with the war. 2 Exports to Russia, which remained subject to EU sanctions, continued to dwindle from an already very low level. Substantial revenue cuts were recorded in exports to other sales markets in South and East Asia. Sales to China fell particularly sharply, with motor vehicles and motor vehicle parts playing a considerable role (see the supplementary information on China).

In terms of the product mix, price-adjusted exports of capital goods and numerous intermediate goods decreased, whereas deliveries of consumer goods increased. Exports of motor vehicles and motor vehicle parts saw a steep drop. This was due to declining revenue in key sales markets. Deliveries to the United States rose noticeably in value terms. Exports of motor vehicles and motor vehicle parts to China fell again considerably, however, as Chinese demand shifted strongly to electric vehicles, especially to domestic brands (see the supplementary information on recent developments in German exports to China). There was also a strong decline in sales of motor vehicles to the euro area and the United Kingdom. Exports of classic capital goods such as machinery likewise fell sharply in price-adjusted terms. In addition, exports of machinery and equipment and intermediate goods from the electronics and electrical equipment sectors saw a marked contraction. The same was true of iron and steel products, which have a particularly energy-intensive manufacturing process. Exports of chemical products, which are likewise energy-intensive, rose sharply. However, this did not make up for even one-third of the considerable decline in the previous year. Production of these had been severely affected by the sharp rise in energy prices since the start of the war in Ukraine. In the case of consumer goods, deliveries of pharmaceutical products were noticeably higher in the reporting year. For energy products, the volume of electricity and natural gas exports was down, quite considerably in the latter case, 3 whereas significantly more refined petroleum products were exported. 4

The German export industry once again lost market share in its sales markets last year. In 2024, German sales markets grew more strongly than exports. These kinds of losses in market share have been occurring for several years now, but have been particularly pronounced since the pandemic. Moreover, surveys of German exporters show that they have already been tending to rate their competitiveness more and more poorly for some time, even prior to the coronavirus crisis. Competitiveness has accordingly fallen dramatically in recent years.

The losses of competitiveness illustrate the structural challenges facing the German economy, some of which have already been making themselves felt for some time. 5 Some of these structural problems became more apparent once the acute crises of 2020 and 2022 had subsided. They were also compounded by unfavourable developments which had a particular impact on the German economy. These include the higher energy prices since Russia’s war of aggression against Ukraine, 6 the challenges of the green transition, which recently posed problems for the German automotive industry especially, 7 and firms’ increasing complaints about bureaucratic burdens. 8 Furthermore, mounting competitive pressure from Chinese firms and the weak growth of the Chinese economy are adversely affecting German exports. 9

Nominal imports from the euro area fell noticeably more sharply than imports from third countries. Both regions suffered from the lower demand from Germany for key capital goods such as motor vehicles and machinery; furthermore, euro area countries did not benefit from the increased demand for pharmaceutical products. Imports from China stayed at almost the prior-year level and thus outperformed the cross-country average. 10 In net terms, German importers benefited from declining prices for energy and intermediate goods. Imports from OPEC countries were down quite considerably in terms of value, mainly because lower volumes of crude oil and refined petroleum products were imported. The value of imports from Norway also fell very strongly. One particular contributor to this was the drop in prices of natural gas, which accounted for almost three-fifths of total German imports from Norway. By contrast, a significantly larger volume of crude oil was sourced from Norway. Deliveries from Russia once again declined quite considerably in percentage terms. 11 They had fallen to very low levels in the previous year owing to EU sanctions in connection with the war in Ukraine.

The product mix of imports developed in a similar way to that of exports. Weak German industrial activity weighed on imports of capital goods and intermediate goods, whereas imports of consumer goods expanded substantially. However, there was a significant increase in purchases of chemical products and, above all, computer equipment manufactured abroad. For energy products, the imported volume of coal, 12 refined petroleum products and natural gas dropped steeply. However, this contrasted with a strong increase in the volume of crude oil deliveries. In addition, the volume of imported electricity rose considerably, which was mainly related to the decline in domestic electricity production. 13  

In 2024, the deficit in the cross-border services account increased considerably on the year to €74 billion. The international exchange of services with Germany has become enormously important over the past few years. In 2024, services to the tune of almost €1 trillion were purchased from abroad or sold to other countries by Germany. Compared with the goods trade revenue of around €2½ trillion, this is not an insignificant economic activity. In contrast to international goods trade, however, Germany routinely imports more services than it exports. 14 Expenditure rose at a faster pace than revenue last year. The deficit thus increased by a little more than €10 billion on the year, resulting in the highest deficit in the Federal Republic of Germany’s existence. 

Cross-border travel is the main reason for the very negative services account balance. At €111 billion, residents’ foreign travel expenditure was three times as high as income from foreign travellers in Germany (€37 billion). In 2024, the deficit of the travel account alone, a sub-account of services, was equal to the deficit in the services account as a whole. While revenue in this category, which Germany generates predominantly from travel for city trips, trade fairs, events and business trips, so far has not even reached the level of 2019 (prior to the COVID-19 pandemic), expenditure here has substantially exceeded that level since 2022. Private foreign travel by persons living in Germany was the dominant factor here. In this area, there has been no sign of consumer restraint thus far. In regional terms, the beneficiaries of this were most other EU countries, in particular, as well as Turkey. Expenditure on long-distance travel, meanwhile, just reached its pre-pandemic level. 

The lion’s share of the services account’s total assets stems from the international exchange of commercial services. 15  Although services may appear less tradeable internationally than physical goods, sales of the former have quadrupled over the past 20 years. 16 In addition to increasing international interconnectedness, ongoing digitalisation has significantly expanded trading opportunities. However, commercial services are also subject to cyclical fluctuations; here, too, the subdued economic situation in Germany was reflected. Revenue from services exports rose by just over 3% on the year in 2024, which was significantly weaker than the average of the past two decades. At just over 6%, expenditure rose more sharply, although it, too, fell short of the long-term average. In the reporting year, the previously small deficit for all commerce-heavy services taken together rose by €11 billion to just under €21 billion. This was partly due to other business services, including research and development, professional and management consultancy services, commissions, and technical and other services. In addition, the reduction of a one-off effect from the pandemic again led to a smaller surplus in the item “charges for the use of intellectual property”. The effect is related to the development of vaccines, generating exceptionally high revenue in 2021 and 2022, in particular. 17  

Together with trade in goods, it was the primary income balance that contributed to Germany’s high current account surplus. The surplus for 2024 came to €149 billion, representing an increase of approximately €12 billion compared with 2023. As a result, net primary income alone accounted for around 3½% of GDP.

The high primary income surplus is mainly the result of net investment income. Payments by residents to foreign investors grew at a similar rate on the year as income from domestic investors abroad. This was mainly on account of interest rates being hiked once more – albeit to a far lesser extent than in the previous two years. However, as German residents have far greater exposures abroad than foreign investors do in Germany, the amount domestic investors and lenders redeemed from cross-border investment income was far higher than their expenditure. 

As in the previous year, the deficit in the cross-border secondary income account fell in 2024. 18  Expenditure exceeded revenue by €64 billion in the reporting year. There were increases in sales, primarily in connection with non-government cross-border secondary income. The volume of remittances of foreign nationals living in Germany rose, although they play a relatively minor role in terms of cross-border payment flows. By contrast, government cross-border expenditure and corresponding revenue both declined, with government expenditure falling on balance. Here, too, the reason lies in Germany’s persistently subdued economic output, which, to a significant extent, acts as a measure of the expenditure on Germany’s contributions to the EU budget, which were correspondingly lower in 2024.

The German capital account captures cross-border transactions of non-produced non-financial assets and capital transfers and closed 2024 with a deficit of €20½ billion. In the previous year, the deficit had amounted to €27 billion. In terms of transaction volume, the capital account is generally significantly smaller than the current account or financial account, but has gained in significance in recent years. This is because the price of emission allowances under the European Union Emissions Trading System (EU ETS) rose significantly at the end of 2021, after important reforms had entered into force. 19 Since 2022, trade in emissions allowances has been by far the most important item in the category of non-produced non-financial assets and is also shaping developments throughout the capital account as a whole.

From a German perspective, cross-border transactions of non-produced non-financial assets closed 2024 with a deficit of €16 billion, which was thus somewhat lower than in 2023 (€19½ billion). The shortfall was almost exclusively attributable to the surplus in expenditure on emissions allowances trading (€15½ billion). Cross-border trade in intellectual property also dominated sales in 2024, which was reflected in a deficit of €½ billion.

In terms of capital transfers, Germany likewise recorded higher expenditure than revenue on balance in 2024 (€4½ billion). A year earlier, this deficit had amounted to €7½ billion. Alongside a large number of other types of transfer, insurance benefits for major losses contributed €1 billion to the deficit in this category.

Germany’s net capital exports amounted to €239½ billion in 2024, which, like the current account balance, was thus up on the previous year’s level (€195½ billion). The remaining difference between the balances on the current account and the capital account on the one hand and the balance on the financial account on the other hand is attributable to statistical errors and omissions (€13 billion).

Against the backdrop of high political and economic uncertainty, enterprises continued to make relatively little direct investment internationally. According to preliminary UNCTAD data, global foreign direct investment (FDI) flows again remained subdued in 2024. 20 Despite an increase of as much as 11% on the year, FDI remained below the volumes usually recorded. The increase in global FDI was mainly concentrated in a number of European countries where specialised holding companies are located. These serve as a financial hub for cross-border capital flows and largely pass on to other groups any funds provided. 21 According to UNCTAD, adjusting FDI flows in these countries for potential double-counting shows that global FDI flows were again 8% lower than in the previous year. Direct investment flows to and from Germany were lower in 2024 than in 2023 as well.

In 2024, German portfolio investment with non-residents was mainly influenced by a looser, yet still restrictive, monetary policy on both sides of the Atlantic in the second half of the year. German investors showed a strong interest in foreign money market funds, which offered attractive amounts of interest income while being comparatively low in risk. However, higher-risk securities were also acquired. Interest in mutual fund shares (excluding money market funds) was particularly prominent, as they allow investors to take on a variety of risky securities without directly owning them. Conversely, foreign investors increasingly sought German public sector debt securities, with the primary intention of replenishing their holdings of Federal securities. In the years following the start of the asset purchase programmes in autumn 2014, foreign investors had sold Federal debt securities to the Eurosystem on balance. The turnaround that began in 2022 and the increased purchases by foreign investors since 2023 are now also reflected in the renewed rise in international free float.

Other investment is strongly influenced by banking system transactions and ended 2024 with net capital exports. Commercial banks’ net claims rose significantly on the year, while the Bundesbank’s net position remained virtually unchanged. However, the Bundesbank’s TARGET claims on the ECB, changes in which are also recorded under other investment, declined.

According to the German Chamber of Commerce and Industry, German enterprises’ plans for investing abroad in 2024 were rather cautious. 22 Alongside weak demand both at home and from abroad, the decreasing non-price competitiveness of Germany as a business location also came under growing scrutiny. 23 Compounding this were geopolitical risks and increasing protectionist tendencies, which enterprises have to take into account when making cross-border investments. The significant overall increase in uncertainty for the global economy thus posed particular challenges for German enterprises with regard to their cross-border investment decisions last year. In addition, in 2024, the cost savings motive also played a greater role again in direct investment planning, relative to previous years. However, the development and expansion of sales and customer services continued to be particularly strong drivers of German industrial enterprises’ foreign investment. Many enterprises assessed the economic outlook in business locations abroad as more favourable than the outlook in Germany. 24

In this difficult economic environment, cross-border FDI flows to and from Germany resulted in net capital exports of €30½ billion in 2024, following €24 billion the previous year. However, the increase was once again driven by lower gross flows on both sides of the balance sheet. Both German outward FDI and inward FDI were down on their levels of the year before.

Overall, enterprises domiciled in Germany invested around €73½ billion in FDI last year, which was €22 billion less than in the previous year. German investors upped their equity capital in foreign enterprises by €60½ billion. This was mainly achieved by reinvesting earnings, whilst investment via equity capital in the narrower sense (i.e. additional or new equity investments) contributed around one-fifth to this amount. A number of services-oriented sectors were the main players here. German enterprises furthermore provided affiliated enterprises abroad with funds totalling €13½ billion net via intra-group lending. Measured in terms of volume, cross-border corporate takeovers in 2024 by firms domiciled in Germany lagged behind the previous year, while the number of transactions increased. 25

The United States received the largest shares of funds, accounting for more than one-quarter of all German FDI in 2024. The business outlook was deemed predominantly positive by the German firms operating there. 26 The United States was thus once again particularly crucial to the business of internationally active enterprises domiciled in Germany (see the supplementary information on German capital links with the United States and the German current account surplus vis-à-vis the United States). At the same time, German enterprises provided affiliated enterprises in the United States with additional funds in this way. They mainly invested funds via equity capital, particularly in the narrower sense. On balance, they also granted large volumes of financial credit to affiliated enterprises in the United States. 

More than one-third of German FDI benefited EU partner countries last year, with the majority going to other euro area countries. German FDI relationships in 2024 were largely shaped by higher outflows of funds to the Netherlands and Luxembourg as well as return flows from Belgium and Ireland, with some of these countries playing a key role as holding locations. In addition, within Europe, German enterprises provided affiliated enterprises in Switzerland and Sweden with a larger volume of direct investment funds. 

Outside Europe, larger amounts were once again reinvested in affiliated companies in China via profits generated there. This trend, which has been observed for some time now, masks the fact that German parent companies have been reducing their equity capital in the narrower sense in China over the past few years; the same is true of 2024. 27 The supplementary information below (The role of geopolitical aspects for German foreign direct investments in partner countries) goes into greater detail about China’s indirect importance for German FDI via common partner countries.

In 2024, there was a net inflow of €43½ billion of FDI funds to Germany, primarily via equity capital in the narrower sense and, to a lesser extent, via intra-group lending. Overall, this was markedly less than in the previous year, when foreign investors’ new exposure in Germany amounted to €71½ billion. However, a trend seen in previous years continued as of 2023, signalling a decline in foreign investment in Germany via FDI. This development also contributed to the discussion on how Germany’s role as a business location could be reinforced. FDI data themselves do not yet allow any clear conclusions to be drawn with regard to the reasons for the developments over the past few years – both cyclical and structural factors are likely to have played a role. 28 A study conducted by the Bundesbank shows that the competitiveness of Germany as a business location has been deteriorating for several years now. In particular, non-price competitiveness has declined, indicating structural problems. 29

In 2024, around 70% of German FDI came from enterprises based in euro area partner countries. The main sources of this were cross-border inflows of funds from Luxembourg, the Netherlands and Ireland. In addition, there were large FDI inflows to Germany from Switzerland and Norway. Outside Europe, affiliated companies from the United States were particularly important investors for German firms. On balance, just under one-third of total FDI came from the United States, and this was largely invested in equity capital in the narrower sense. The inflows of FDI to Germany were partly offset by larger return flows to some countries, such as the United Kingdom and Cyprus. This was due to the fact that intra-group lending was dominated by repayments of previously granted loans.

Major central banks’ monetary policy stance remained restrictive in 2024 despite interest rate cuts from mid-2024 onwards. The ECB reduced its key interest rates by 25 basis points for the first time in June, followed by three further interest rate steps of the same size by the end of the year. 30 The Fed began to lower its policy rates in September, initially significantly by 50 basis points, followed by 25-basis-point steps in November and December. As the disinflation process was only gradual, interest rates remained restrictive.

Germany’s cross-border portfolio investment resulted in net capital exports of €31½ billion in 2024. In the previous year, when gross sales were significantly lower, Germany had recorded net outflows of €2 billion in portfolio investment. Transaction growth was largely attributable to “Brexit banks”, i.e. foreign institutions that had expanded their business areas in Germany following the United Kingdom’s withdrawal from the EU. The fact that the Eurosystem completely discontinued its reinvestments by the end of the year was another factor. The Eurosystem had already halted reinvestments under the expanded asset purchase programme (APP) in 2023. As of July 2024, it also no longer reinvested maturing securities from the pandemic emergency purchase programme (PEPP) portfolio holdings in full and reduced its purchases to zero by the end of the year. The individual national central banks thus left the market as a buyer group. As a result, government debt securities now need to be absorbed again by the private sector, which has pushed up free float, i.e. the stock of freely tradeable securities. In addition, some euro area countries issued significantly more bonds than in the previous year, which increased the supply of these securities.

The positive balance in portfolio investment was attributable to domestic investors’ high levels of investment abroad. At €220 billion, they acquired significantly more foreign securities in 2024 than in the previous year (€154½ billion). This was particularly true of money market funds and other foreign mutual fund shares (together totalling €112 billion). One reason for the high demand for interest-bearing instruments was the comparatively high foreign interest rates. The euro had also come under pressure due to the strong interest rate differential with the US dollar, making investment in the United States even more attractive. Equity-related mutual fund shares benefited from the comparatively favourable economic outlook in the United States and some European partner countries. This is consistent with the fact that US technology shares listed in the Nasdaq appreciated considerably over the course of the year, outperforming most of the bullish global equity indices.

At €103 billion, demand for foreign debt securities declined in 2024, but was still relatively high. Just under two-thirds of purchases consisted of euro-denominated bonds on balance, which was markedly lower than in 2023 but exceeded the figures for all other years since the APP was launched. On an average of the years 2015 to 2022, German investors had invested only €18 billion net in such securities – indeed, in some years, they had even sold securities. The exceptionally high demand in 2023 is likely to have been due to German investors having already increased their portfolios of euro bonds substantially when the APP was discontinued. Investors therefore believed they had some catching up to do. Furthermore, German investors purchased foreign currency bonds (€24½ billion) and money market paper (€12 billion) in 2024. Demand was up slightly on the year in both segments. Looking back, foreign currency bonds benefited from positive valuation effects owing to the weakness of the euro vis-à-vis major trading partners. In nominal effective terms, the euro depreciated by 1½% in 2024. 31  

Conversely, non-residents purchased German securities worth €188½ billion net, the highest value since the global financial crisis. The last time international investors had shown even greater interest in German paper was in 2007. Last year, they purchased long-term debt securities worth €210½ billion, with public bonds making up the lion’s share. The strong demand for German government securities was fostered by the Eurosystem phasing out its reinvestments, which made this type of securities more readily available in the market. This was reflected in a diminishing scarcity premium. In recent years, Federal bonds (Bunds) had particularly high scarcity premia due to their popularity as collateral and as a means of holding liquidity. 32 However, as the risk appetite of many investors also increased, foreign demand for private bonds issued in Germany was also significantly higher.

As in the previous year, foreign investors disposed of German shares (€5½ billion, 2023: €13 billion). On balance, international investors were not interested in shares of companies domiciled in Germany, despite high price gains on the German stock exchange. This may have been due to economic agents assessing the economic outlook in Germany as weak in both economic and structural terms. In this setting, investors clearly preferred – in net terms – to take advantage of price gains in the German equity market rather than to continue investing in German enterprises. Contrary to the trend, investors from the United States acquired German shares (€5½ billion), while the highest sales were recorded in the United Kingdom (€4 billion), Luxembourg (€3½ billion) and the Netherlands (€3½ billion). However, as these three countries are important international financial centres, these transactions are likely to have been driven mainly by market participants from third countries, including domestic investors.

Financial derivatives (which are aggregated into a single item in the balance of payments) recorded higher net capital exports than in the previous year. They amounted to €42 billion, following €36 billion in 2023. Options trades were the main factor contributing to the outflow of funds. 33 Forward and futures contracts relating to gas increased by around one-quarter in 2024 compared with the previous year. However, this meant that they remained well below the balance of 2022, which had risen sharply as a result of Russia’s war of aggression against Ukraine.

Other investment recorded net capital exports of €137 billion in 2024, almost the same as in the previous year. 34 However, developments on the assets and liabilities sides differed between the two years. Liabilities to non-residents fell sharply in 2023, while claims on non-residents rose significantly in the reporting year 2024. Such changes are typical in other investment. In particular, the holdings of currency and deposits in the banking system are subject to sharp fluctuations and are often accompanied by individual institutions expanding or reducing their balance sheets. Netted items are therefore generally more meaningful. That said, it is important to keep an eye on assets and liabilities; they can provide important information on the underlying payment flows and on possible changes in the financial infrastructure. Examples of this include the sharp increase in gross transactions following the United Kingdom’s withdrawal from the EU and the settlement of the Eurosystem’s asset purchases via TARGET. 35

The net capital exports of monetary financial institutions (excluding the Bundesbank) to non-residents amounted to €107½ billion in 2024. Claims on foreign institutions arising from currency and deposits rose particularly significantly. Claims on group-affiliated banks had a particular bearing here: such arrangements are often based on business management decisions relating to liquidity management. Commercial banks’ claims on non-residents also increased sharply as a result of financial loans being granted to enterprises and households. Conversely, foreign players increased their deposits with German institutions, consisting of deposits from banks abroad as well as enterprises and households domiciled abroad.

Bundesbank accounts recorded net capital exports of €3 billion last year. The Bundesbank’s gross claims and gross liabilities vis-à-vis non-residents each declined to a similar extent in 2024. TARGET claims on the ECB fell by €47 billion, which was less than in 2023 (€175½ billion). This is because the winding-down of monetary policy securities portfolios in the context of tighter monetary policy has not reduced German TARGET claims since mid-2023 as significantly as they had previously risen when the balance sheet was being built up under the asset purchase programmes. 36 One reason for this appears to be a change in investor behaviour in the market for euro-denominated government bonds. In other euro area countries, for example, domestic investors in particular recently purchased the newly issued national government bonds. Unlike with purchases by investors from third countries, which are often settled via Germany, no central bank liquidity flowed out of Germany in this case. Another reason for this was the supply effect for Bunds described above. Once the Eurosystem had phased out its monetary policy asset purchases, private investors were able to restock their supply of Bunds more easily, as outlined above. This resulted in an exceptionally strong demand from abroad for German Federal securities, for example. Where investors from other euro area countries acquired these securities, central bank liquidity flowed to Germany, which, when viewed in isolation, increased Germany’s TARGET balance. 37

The Bundesbank’s reserve assets decreased by €1½ billion in 2024 on account of transactions. On balance, this was mainly due to lower claims on other reserve assets and a decline in the reserve position in the IMF.

The international reserve holdings are also influenced by balance sheet adjustments which, in compliance with internationally agreed accounting standards, are not recognised in the balance of payments. The end-of-year revaluation of the reserve assets resulted in an increase of just under €73 billion in 2024. This was due chiefly to an increase in gold prices compared to the previous year. On the reporting date of 31 December 2024, the value of Germany’s reserve assets stood at €363½ billion.

The balance of payments data on which this article is based were published on 14 March 2025. They include foreign trade data from the Federal Statistical Office, which were published on 19 February 2025.

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