Non-final working translation 

Germany’s current account surplus decreased significantly in 2025, falling by €52 billion to €203 billion. As a share of GDP, the balance declined by 1½ percentage points to 4½ %, its second-lowest level in 20 years. This was mainly due to a smaller surplus in the goods account. 

Exports remained virtually unchanged in price-adjusted terms, while sales markets grew significantly. Exports to the United States fell sharply following the introduction of US import tariffs in 2025. In addition, exports to China contracted strongly, partly owing to a considerable decline in exports of motor vehicles and parts. By contrast, demand from euro area member states increased at a solid pace.

The smaller surplus in the goods account was mainly due to a significant broad-based increase in goods imports. Imports from outside the euro area – including China – rose particularly strongly. Germany’s goods trade deficit with China rose by €28 billion to €72 billion. Trade in goods with China thus accounted for the largest share of the decline in the current account balance. 

More in-depth analyses show that the German export sector once again lost global market share. In addition to a further deterioration in competitiveness, the composition of the product range also proved to be a drag on export growth. According to a new Bundesbank survey of firms, US tariffs are weighing on large parts of the manufacturing sector, although survey responses indicate that the costs of the tariffs are borne largely by US importers. At the same time, many firms are feeling the effects of intensifying competition from China, especially in the international sales markets. 

Germany’s current account surplus was accompanied by net capital exports in 2025, too. Persistent geopolitical risks, uncertainty about future economic policy in the United States and the depreciation of the US dollar against the euro influenced capital movements. As a result, German capital flows shifted towards the euro area. At the same time, gross transactions increased. These two developments applied to both direct investment flows and portfolio investment. New debt securities issued to finance Germany’s off-budget special fund for infrastructure and defence increased the supply of Bunds. As particularly safe assets, these were highly sought-after among foreign investors, too. In return, liquidity flowed into the German banking system. For the Bundesbank, this meant that its TARGET claims on the ECB did not fall as sharply as the reduction in the Eurosystem’s monetary policy securities portfolio would actually suggest.

Germany’s current account surplus decreased significantly in 2025. It fell by €52 billion to €203 billion. As a share of GDP, the balance declined by 1½ percentage points to 4½ %, the second-lowest level in 20 years. Only in 2022 was it lower, amid the energy crisis.

The decline in the current account surplus is due mainly to the smaller surplus in goods trade. In nominal terms, exports of goods grew only slightly in 2025 and thus more slowly than world trade. This was due to a further decline in the competitiveness of Germany’s export sector, as well as weak global demand for several goods that are important for Germany’s export basket (see the supplementary information entitled “Latest developments in German export market shares and the drivers behind them”). Exports to China fell sharply again, mainly due to substantially lower exports of motor vehicles and parts. In addition, the new US tariffs strongly dampened German exports to the United States (see the supplementary information entitled “The impact of US tariffs on German firms”). Higher exports to euro area countries boosted Germany’s exports.

The main factor behind the smaller surplus in the goods account was a significant increase in imports. Import growth was broad-based. Imports from countries outside the euro area – including China – expanded particularly strongly. This was partly due to the appreciation of the euro, which made foreign goods cheaper for German importers. In addition, in the reporting year, inventories in Germany were replenished and domestic consumption rose markedly. 

The global economic environment in 2025 was shaped by the US administration’s tariff policy and the resulting increase in trade policy uncertainty. The International Monetary Fund reported that global economic growth was stable, but below average by historical standards. Protectionist tendencies shaped cross-border trade in goods. According to the Centraal Planbureau, global trade volumes nevertheless rose significantly by 4½ %. The euro appreciated significantly, which dampened the price competitiveness of the German export sector. Global industrial activity was subdued and global commodity and energy prices declined. However, they remained above their long-term average levels.

The nominal foreign trade surplus fell significantly in 2025 owing to volume effects. Price-adjusted exports remained virtually unchanged. By contrast, price-adjusted imports expanded sharply. Price developments, however, mitigated the decline in the balance. Export prices rose moderately. At the same time, import prices decreased slightly, partly as a result of lower commodity prices. On balance, Germany’s terms of trade improved.

In regional terms, the current account surplus with non-euro area countries declined. It decreased by 1¼ percentage points to 2¼ % of GDP. This was mainly attributable to a smaller surplus in goods trade. The widening of the current account deficit with China by €30 billion to €54 billion accounted for more than half of the change in the current account balance. By contrast, the current account surplus vis-à-vis euro area countries remained largely unchanged, at 2¼ % of GDP.

Aggregate net lending/net borrowing fell markedly in the reporting year. 1  Aggregate saving declined substantially, while net investment picked up slightly again. Non-financial corporations’ net lending fell significantly. Their savings decreased owing to higher employee compensation. At the same time, investment increased slightly. Households reduced their net lending. Their saving declined as private consumption increased markedly and the saving rate continued to normalise. Their consumption of fixed capital exceeded gross investment, consistent with the persistently subdued level of housing construction activity. General government continued to report net borrowing, which remained largely unchanged overall.

Price-adjusted exports remained essentially unchanged, while imports picked up strong momentum. In price-adjusted terms, goods exports were slightly lower, down by ¼ % on the year. By contrast, imports grew sharply, increasing by 4½ %. In terms of value, exports expanded slightly owing to a moderate rise in export prices. Imports did not increase by quite as much in nominal terms as in real terms because import prices were slightly lower overall. The marked increase in the price of imported consumer goods and the very sharp drop in energy prices played a role here. As a result, the foreign trade surplus narrowed by €42 billion to €201 billion. 

In regional terms, revenue from exports to the euro area rose sharply, while revenue from exports to countries outside the euro area declined moderately. Exports to non-euro area countries were also dampened by the appreciation of the euro. German enterprises recorded significant revenue growth overall in their exports to key euro area sales markets. Aerospace exports were a supporting factor. 2 Exports for other major trading partners in Europe also rose sharply. By contrast, sales to the United States fell by a considerable 9½ %, shaving around 1 percentage point off total German export growth. This was mainly attributable to the new import tariffs imposed by the US Administration in 2025 (see the supplementary information entitled “German exports to the United States down in 2025 due to US tariff hikes”). Although the United States remained Germany’s main export market, its share of total German exports fell from 10½ % in the previous year to 9¼ %. 3  

Losses in revenue were recorded for exports to China, in particular. This means that, once again, these exports fared far less favourably than total German exports. 4 This was due to an extraordinarily sharp drop in exports of motor vehicles and motor vehicle parts (−⁠ 33 %), which had already contracted quite considerably in the previous two years (−⁠ 18 % and −⁠ 17¼ %). This was partly due to Chinese buyers preferring electric vehicles. This segment is, at the same time, mainly served by Chinese producers. In addition, exports of other industrial goods declined sharply. Besides subdued economic activity in China, this is likely to have been due to the fact that Chinese products have already been more competitive than goods sourced from abroad for quite some time. 

In the export portfolio, exports of motor vehicles and machinery, as well as several energy-intensive intermediate goods, suffered in particular. There was a dip in the volume of exports of iron and steel products and chemical products, which are energy-intensive to manufacture. The decline in exports of motor vehicles and motor vehicle parts was mainly due to plummeting export revenue in the important sales markets of China and the United States. Overall, motor vehicle exports to countries other than China and the United States increased only moderately. In addition, exports of traditional machinery and equipment remained distinctly lower than the previous year’s level. Uncertainty among investors around the world due to geopolitical risks and the new tariffs imposed by the US Administration is likely to have played a role here. In addition, German manufacturers of machinery came under increasing competitive pressure in foreign markets (see the supplementary information entitled “Latest developments in German export market shares and their driving forces”). By contrast, exports of electrical engineering products increased markedly in price-adjusted terms, while exports of electronics rose particularly sharply. Sales of consumer goods to other countries, including pharmaceutical products, went up significantly.

From a regional perspective, imports from non-euro area countries grew significantly more strongly in value than the those from the euro area. Euro area manufacturers benefited less overall from German orders, probably partly due to the appreciation of the euro. Moreover, close supply relationships meant that producers in other central and eastern European EU countries benefited from the fact that German customers were increasingly purchasing motor vehicles and motor vehicle parts there. 5  

Germany’s imports from China rose very sharply in 2025. This raised the question as to whether, given that US tariffs on Chinese imports were sometimes very high in 2025, there was major redirection of Chinese exports towards Europe, including Germany. However, the pattern of German imports from China does not suggest that any major redirection of Chinese exports took place. Imports had begun to rise even before the first tariffs on imports from China to the United States were brought in. Specifically, imports from China for many categories of goods were ramping up significantly as early on as in the first quarter of 2025 when, certain frontloading effects aside, US tariffs on Chinese goods could only have had a small impact. Imports in several categories of goods also saw particularly strong growth up to and during the fourth quarter of 2024 or weakened over the course of 2025. Apart from this, imports from other supplier countries also rose sharply for many categories of goods in the reporting year. Moreover, a stronger rise in Germany’s imports from China than from other supplier countries is already a well-established pattern. 

Imports rose on a broad basis across the product range. In the reporting year, many foreign manufacturing sectors benefited from higher demand from Germany’s industrial sector for imports of capital and intermediate goods. Imports of electrical engineering products and electronics, especially computer equipment, and of fabricated metal products rose particularly sharply. In addition, imports of other transport equipment experienced a considerably stronger increase than in recent years, with aircraft and spacecraft playing a key role. There was a steep rise in demand for imports of machinery, iron and steel products, as well as chemical products. Imports of motor vehicles and motor vehicle parts also picked up momentum. Purchases of foreign consumer goods surged, reflecting the distinct increase in consumer demand in Germany. 

Compared with previous years, energy products had a smaller impact on the value of imports. On the one hand, German energy importers were affected by a slight rise in the price of natural gas and a considerable hike in the price of electricity. On the other, they benefited from a substantial drop in the price of crude oil and refined petroleum products. Looking at energy products, imports of coal rose markedly in terms of volume. 6 The volume of imports grew very strongly for electricity and quite sizeably for natural gas. 7 From a regional perspective, nominal imports from Norway rose significantly overall, with a very steep rise in the volume of natural gas imports playing a role. The value of imports from OPEC countries expanded only marginally, as while the volume of imports of crude oil and petroleum products increased considerably, the fall in the prices of these products had a stronger dampening effect. 8 Imports from the United States grew more sluggishly overall than the average across all suppliers. One factor here was that imports of natural gas from the United States rose quite substantially in terms of volume, but imports of crude oil and petroleum products fell very sharply. 9  

In the reporting year, the deficit in the cross-border services account increased to €74 billion. International trade in services has become much more important for Germany over the past two decades. Revenue from the sale of services to other countries, in particular, has risen steeply over the past 20 years. In 2025, services accounted for one-quarter of income from total exports. In 1995, their share stood at just one-eighth. The significance of services also grew in the context of imports. Spending on these as a share of total expenditure on goods and services from abroad rose from 24¼ % in 1995 to 31¼ % in 2025. Although exports of services have grown significantly more strongly than imports over the past two decades, Germany’s services account has remained in the minus. 10 The deficit widened in the reporting year, as expenditure rose by €3 billion more than revenue.

The large deficit in the services account is mainly driven by cross-border travel. In 2025, this deficit rose again by €1 billion to reach €78 billion – the highest nominal deficit since 1991. Residents’ expenditure on foreign travel rose slightly on the high level recorded in the previous year. This was due to expenditure on business travel; meanwhile, spending on private travel declined somewhat. At €100 billion, however, German residents’ expenditure on private travel abroad was only slightly lower than the record figure of the previous year. While spending on travel to EU countries remained virtually constant, it rose sharply for travel to Switzerland and Türkiye. Looking at long-haul destinations, spending on travel to Asia increased strongly, whereas expenditure on travel to the United States fell considerably. Revenue from travel, which Germany generates predominantly from travel for city trips, trade fairs, events and business trips, remained virtually unchanged in 2025, leaving it still only slightly higher than its pre-pandemic level of 2019.

Commercial services accounted for the largest share of total assets in trade in services. 11 The commercial services balance itself remained unchanged at €15 billion in 2025. However, individual sub-accounts saw marked shifts. For instance, the deficit in transport services increased by €2 billion. This was due to a decline in revenue that stemmed largely from developments in the maritime freight sector. The considerable drop in freight rates last year according to the Drewry Container Index was probably the main factor here. At the same time, the maintenance and repair services deficit contracted markedly owing to higher revenue. The aviation industry may have contributed to this, as German enterprises are well positioned worldwide in the field of aircraft maintenance. 12  

The government services balance contributed markedly to the wider deficit in the services account. The surplus in this traditionally small sub-account shrank by €2 billion to €1 billion. This was due to significantly higher government spending on cross-border services. In addition to goods and services for diplomatic missions abroad and certain transactions by international organisations, this sub-account also includes expenditure on goods and services procured from abroad for Germany’s armed forces stationed abroad. The general increase in defence spending was also reflected in higher expenditure on government services in 2025. 13

The primary income account contributed almost as much to Germany’s current account surplus as trade in goods. The surplus increased by €2 billion to stand at €161 billion in 2025. The primary income balance alone therefore came to 3.6 % of GDP; this was only slightly lower than that of trade in goods, which amounted to 4.1 % of GDP. The high primary income surplus was mainly the result of net investment income. In 2025, residents’ income from investment abroad declined significantly. However, payments by residents to foreign investors fell even more sharply, meaning that the surplus in the primary income account went up. The decline in interest rates in the reporting year played a role in the overall drop in income from and expenditure on investment. The fact that receipts fell less sharply than expenditure was also due to the significant increase in income from direct investment. This mainly stemmed from higher reinvested profits linked to the sound earnings situation of German enterprises in key investment locations.

The secondary income balance remained virtually unchanged in 2025. The general government deficit rose markedly owing to significantly higher transfers to other countries. At the same time, the deficit in non-government secondary income declined perceptibly due to a considerable increase in revenue. 

The German capital account captures cross-border transactions of non-produced non-financial assets and capital transfers and closed 2025 with a deficit of €28 billion. In the previous year, the deficit had amounted to €22 billion. Though the capital account is generally significantly smaller in transaction volume than the current account or the financial account, it has gained in importance in recent years with the expansion of the European Union Emissions Trading System (EU ETS).

From a German perspective, cross-border transactions of non-produced non-financial assets closed 2025 with a deficit of €19 billion and thus somewhat higher than in 2024 (€15 billion). The deficit in 2025 was solely attributable to emissions allowance trading in the EU ETS, with this item also being the most important in the non-produced non-financial assets category in recent years. The category also includes transactions using unbacked crypto-assets such as bitcoins. However, the turnover from these assets recorded in the balance of payments is low. From a German perspective, it posted a small net revenue surplus of €61 million.

In terms of capital transfers, Germany likewise recorded higher expenditure than revenue on balance in 2025 (€9 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 accounted for €3½ billion of the deficit.

Germany’s net capital exports amounted to €263 billion in 2025, slightly up on the previous year’s level (€249½ billion). The 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 (€88½ billion).

Direct investment flows to and from Germany recovered somewhat after several years of declining gross flows, but continued to be influenced by geopolitical tensions and increasing uncertainty surrounding the United States’ economic policy stance. According to preliminary UNCTAD data, global direct investment flows rose by 14 % in 2025. This represented a significant recovery compared with the weak pace of growth seen in previous years. 14 According to balance of payments data, transactions involving German investors were also higher in 2025 than in the previous year, in line with global developments. However, regional differences were apparent. The share of German direct investment in the European Union rose to more than one-third. The United States remained the key target outside the European Union, but its share in Germany’s total direct investment outflows declined. At least in terms of German direct investment, the higher tariffs imposed by the United States on imports from Europe have so far not had the effect its government hoped for of bringing production to US shores. German enterprises also held back on new investments in China. This development has been observed for several years, but it is masked by the high profits reinvested by these firms there. Conversely, Germany became more attractive to foreign investors again in 2025. The negative trend of previous years was temporarily halted and larger direct investment inflows were received than in 2024.

In 2025, Germany’s portfolio investment with non-residents was influenced by, amongst other factors, growing uncertainty surrounding policy developments abroad. In 2025, German investors added almost no further foreign shares to their portfolios on balance. By contrast, their interest in foreign investment funds, which, for their part, invest a large part in equity securities, remained unchanged. This could be due to the fact that mutual fund shares also allow retail investors to diversify their assets broadly and thus reduce overall risk. Foreign bonds also attracted great interest, with the bulk of newly acquired securities denominated in euro. In regional terms, it is striking that German investors disposed of US securities on balance in 2025. This was the case for shares and debt securities alike, while shares issued by US investment funds remained in demand. German investors may be increasingly considering investments in the United States to be risky. In the case of shares, the high valuation of some American tech companies may have played a role in the decision to sell. In fact, profit-taking could be observed among German shareholders at the end of the year, in particular. Regarding bonds, among other things, the controversial debate about the future stance of monetary policy in the United States and the significant depreciation of the US dollar against the euro unsettled German investors. Conversely, demand from foreign investors focused mainly on German debt securities, preferably government bonds. This underscored their unbroken confidence in Germany as a safe asset issuer. At the same time, the German off-budget special fund for infrastructure and defence, which was launched in 2025, increased the supply of German debt instruments and, in turn, boosted cross-border trade in these. By contrast, non-residents were hesitant to purchase German shares and mutual fund shares, even though stock market values generated solid returns last year and the C-DAX performance index increased by 22 % over the course of the year. 15

Other investment is strongly affected by payment flows related to transactions elsewhere in the balance of payments. Export revenue from trade in goods typically initially leads to net capital exports in other investment. Cross-border asset purchases are also accompanied by transactions in other investment. The sum of all these individual entries led to net capital exports in other investment in 2025. By contrast, the Bundesbank’s TARGET claims on the ECB, changes in which are also recorded under other investment, declined slightly.

At the beginning of 2025, German industrial enterprises were still rather cautious about their plans for foreign investment. 16 They were not only reacting to uncertain economic developments at home and abroad. Geopolitical factors and increasing trade barriers also made investment decisions more difficult. This rather defensive stance was also evident in the fact that only 30 % of enterprises surveyed cited market exploration as the most important reason for their foreign investment. Meanwhile, 35 % of respondents were focused on potential cost-cutting, putting this goal on par with setting up sales and customer services for the first time since 2008.

In this economic environment, impacted as it is by uncertainty, cross-border direct investment flows to and from Germany resulted in net capital exports of €11½ billion in 2025, following €23 billion the previous year. However, the decrease was driven by higher gross flows on both sides of the balance sheet. On balance, German direct investment outflows were somewhat higher than the previous year’s figure, which had marked a long-term low. Direct investment flows into Germany increased more strongly, following weak inflows in previous years. Foreign investors may be expecting the German economy to regain momentum in the coming years. 

Enterprises domiciled in Germany provided affiliated group entities abroad with additional direct investment funds of €97½ billion last year. This was €17½ billion more than in 2024. Specifically, they provided foreign enterprises with €78 billion in additional equity capital. However, only €11 billion of this was attributable to equity capital in the narrower sense. These new investments can provide indications of enterprises’ future direction. By contrast, reinvested earnings, at €65 billion, (as a further component of equity capital) played a prominent role. German enterprises furthermore provided affiliated enterprises abroad with additional funds totalling €19½ billion net via intra-group lending.

In 2025, partner countries in the European Union attracted one-third of Germany’s direct investment outflows. This once again underlined the importance of this region for German economic relations. However, within the European Union, two countries mainly known as holding company locations, the Netherlands and Luxembourg, were at the forefront of these statistics. A significant portion of the funds that flow to these countries are transferred from there to group units in other countries. 17

Outside the European Union, most of Germany’s direct investment outflows last year were to the United States (€29 billion), the United Kingdom (€18½ billion) and China (€3½ billion). Compared with the previous year, the regional structure of German direct investment flows has thus shifted somewhat. In 2024, the United States, at €37 billion, was by far the most important target for German direct investors ahead of the European Union. By comparison, measured in terms of total direct investment flows, German enterprises were now investing more heavily in China in 2025 than in the previous two years.

However, German enterprises withdrew equity capital in the narrower sense from China. The significant discrepancy between German direct investment flows to China as a whole and the withdrawal of equity capital in the narrower sense is due to high reinvested profits. Subsidiaries of German enterprises generated high profits in recent years, which largely remain in the country. In the current account, these funds are classified as investment income as retained earnings and recognised in the financial account as reinvested earnings. Apart from these local profits, German direct investors withdrew funds from China in 2025, including intra-group lending. This seemingly contradictory picture of high profits for German enterprises in China on the one hand and a lack of new investment on the other could be linked to mounting geopolitical tensions. These are encouraging enterprises to diversify their investment more strongly than in the past or to relocate to friendlier countries. 18

In the United States, German enterprises held back on direct investment in equity capital, presumably also out of uncertainty about the future economic policy stance on the other side of the Atlantic. Compared with the previous year, fresh direct investment funds (excluding reinvested profits) decreased from €14½ billion to €5 billion, while total equity investment also declined. However, the United States remained the most important target outside the European Union for German enterprises in this category and in terms of total direct investment.

In 2025, there was a net inflow of €86 billion of direct investment funds to Germany, both via equity capital and via intra-group lending. This was markedly more than in the previous year (€57½ billion), but still less than at the beginning of the decade. Following the outbreak of the COVID-19 pandemic, direct investment inflows to Germany had fallen steadily. The recovery last year halted this development, but this cannot yet be interpreted as a turnaround. Just under 40 % of the inflows were made available by foreign parent enterprises via equity capital in the narrower sense and intra-group lending, with reinvested earnings accounting for just over one-fifth. 

The source of direct investment inflows to Germany is similar to that of the target countries of German direct investment outflows – the United Kingdom and the United States, followed the European Union as the most important region of origin. In 2025, half of direct investment inflows to Germany (€43 billion) came from enterprises based in EU partner countries. The main sources were cross-border inflows of funds from Denmark, the Netherlands and France. Outside the European Union, enterprises from the United Kingdom (€26½ billion) and the United States (€12 billion) made the most direct investment funds available. Direct investment inflows to Germany were partly offset by larger return flows to some countries, such as Belgium and Ireland. This was due to the fact that intra-group lending was dominated by repayments of previously granted loans.

The market for cross-border mergers and acquisitions (M&A) involving German enterprises picked up somewhat in 2025. In 2025, enterprises domiciled in Germany acquired more foreign enterprises across borders than in the previous year. This applied in terms of both the number of transactions and the volume of completed takeovers. 19 Cross-border takeovers by foreign investors also rose slightly in 2025 compared with the previous year; likewise in terms of both the volume and number of agreements. 20

In the case of corporate takeovers, the venture capital segment is of particular interest despite its low volume, but it is still comparatively underdeveloped in Germany and Europe. Venture capital refers to the financing of young, innovative enterprises with high growth potential. Measured in terms of volume, cross-border venture capital deals account for only a small part of the total M&A volume. However, they are an indicator of a location’s ability to provide both favourable conditions for innovative enterprises and the necessary risk capital. By international standards, Germany and Europe lag significantly behind other countries – especially the United States – in the area of venture capital financing. 21 The European Commission therefore sees expanding the European venture capital market within the framework of the Savings and Investment Union (SIU) as a primary objective. 22   A Bundesbank study shows that German enterprises play an important role in direct investment worldwide. This is not, however, reflected in international venture capital financing. There is some catching up to be done here.

In 2025, the Eurosystem continued its phase, of gradual monetary policy easing, started in the previous year. Both the ECB and the Fed cut key interest rates in several small steps over the course of the year. In the Eurosystem, the deposit facility rate fell from 3 % in the first half of the year to 2 % in the middle of the year and remained unchanged in the second half of the year. The economic environment was characterised by uncertainty. Geopolitical tensions, trade conflicts and the question of future inflation developments influenced expectations for growth and monetary policy.

For Germany’s cross-border portfolio investment, these factors resulted in net capital exports of €51½ billion in 2025, compared with €20½ billion in the previous year. The intensive cross-border trade in long-term debt securities that had already been observed in the previous year continued, while equities were of lesser significance by comparison.

German investors acquired foreign securities worth €281 billion. Of these, bonds alone accounted for €171½ billion, the majority of which were denominated in euro (€144½ billion). There was particular demand for bonds from France, Italy and Austria. However, domestic investors disposed of US bonds, possibly out of concern about the independence of the US central bank and the associated uncertainty about its monetary policy stance. One possible factor behind this might have been that the US dollar depreciated by 11.6 % against the euro in the previous year. In view of increased geopolitical uncertainty, German investors also moved away bonds from other third countries, especially China, and shifted towards the euro area. They also purchased mutual fund shares (€120 billion). These offer retail investors, in particular, broader diversification compared with individual shares and thus reduce overall risk. In addition, German investors acquired a small volume of shares (€1 billion) while parting with US shares. This could be due not only to uncertainty about the future economic policy stance in the United States but also to profit-taking. Technology shares, in particular, had seen strong value gains in the last few months of the year. In addition, German investors sold foreign money market paper (€11 billion). Liquidity shifts in favour of longer-term investments may have played a role here.

Foreign investors also significantly increased their holdings of German securities. Transactions amounted to €229½ billion net, markedly higher than the previous year’s figure of €197½ billion. The main focus was on bonds (€196 billion), predominantly from public issuers. While the Eurosystem accounted for a considerable share of demand up to the end of 2022, foreign investors increasingly added Bunds to their portfolios as of spring 2023 as monetary policy securities portfolios started to be reduced. This underscores the outstanding role of these securities as safe assets. In addition, the Federal Government issued additional debt securities in 2025 to cover increased financing needs in connection with the newly adopted off-budget special fund for infrastructure and defence. Supply in the capital market thus also increased. Non-residents also purchased German money market paper (€48 billion) in their search for a safe investment. Foreign investors added German mutual fund shares to their portfolios to a much smaller extent (€1 billion). By contrast, they parted with German shares (€15½ billion), reflecting increased risk aversion and a preference for safe investment.

Financial derivatives (which are aggregated to form a single item in the balance of payments) recorded net capital exports of a similar size to the previous year. They amounted to €38½ billion, compared with €43 billion in the previous 12-month period. Options trades were the main factor contributing to the outflow of funds. They accounted for around three-quarters of the total balance of derivatives. Other derivatives transactions accounted for most of the remaining quarter. This included gas futures trading, which had at times recorded significant volumes following Russia’s invasion of Ukraine in February 2022, but has now become somewhat less important.

Other investment recorded net capital exports of €160½ billion in 2025, roughly as high as in the previous year. 23 The net claims of monetary financial institutions (excluding the Bundesbank) as well as enterprises and households rose, while general government and the Bundesbank recorded small net capital imports. Items in the other investment account are generally subject to strong fluctuations. This is particularly true of commercial banks’ financial assets and liabilities. Their transactions are often accompanied by an extension or reduction in the balance sheet of individual institutions. That said, it is important to also keep an eye on their 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 European Union and the settlement of the Eurosystem’s asset purchases via TARGET. 24

The net capital exports of monetary financial institutions (excluding the Bundesbank) to non-residents amounted to €87½ billion in 2025. Claims on foreign institutions arising from currency and deposits rose particularly significantly. As in the previous year, claims on group-affiliated banks played a particular role here. Such arrangements are often based on business management decisions relating to liquidity management. Commercial banks’ external claims 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 €4 billion last year. The Bundesbank’s financial assets and liabilities vis-à-vis non-residents fell by a similar magnitude in 2025. TARGET claims on the ECB fell by €23 billion, which was less than in 2024 (€47 billion). The winding-down of monetary policy securities portfolios since spring 2023 has not reduced German TARGET claims as significantly as they had previously risen when the balance sheet was being built up under the asset purchase programmes. 25 One reason for this is a change in investor behaviour in the market for euro-denominated government bonds. In other euro area countries, domestic commercial banks often took the place of their national central banks, acquiring a large part of newly issued government bonds. Unlike with purchases by investors from third countries, which are often settled via Germany, no central bank liquidity flows out of Germany in this case. In addition, euro area investors purchased Bunds on a large scale and the Bundesbank received central bank money in return. Taken in isolation, this increased Germany’s TARGET balance. 

The Bundesbank’s reserve assets rose by €1 billion in 2025 on account of transactions. This was mainly due to purchases of foreign securities, which were mostly denominated in US dollars. The international reserve holdings are also influenced by balance sheet adjustments which, in compliance with internationally agreed accounting standards, are not recorded in the balance of payments. The end-of-year revaluation of the reserve assets resulted in an increase of €117 billion in 2025. This reflected the year-on-year increase in the price of gold. On the reporting date of 31 December 2025, the value of Germany’s reserve assets stood at €482 billion.

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