Economic activity in Germany may have more or less stagnated in the first quarter of 2022, the Bundesbank’s economists write in the current issue of the Monthly Report. They expect Russia’s war of aggression against Ukraine to have had only a limited impact on Germany’s economy at first. Even so, the repercussions of the war are likely to significantly weaken the recovery, which had actually got off to a strong start. “Disruptions to foreign trade and supply chains, soaring energy prices and heightened uncertainty are weighing on enterprises and households,” the report states.

Germany’s current account recorded a surplus of €24.3 billion in December 2022, up €6.9 billion on the previous month’s level. While the surplus in the goods account actually decreased, the surplus in invisible current transactions, which comprise services as well as primary and secondary income, experienced a considerably stronger increase.

France and Germany are at a crossroads. Banque de France Governor François Villeroy de Galhau and Bundesbank President Joachim Nagel have published a common call for three things.

The finance ministers and central bank governors of the seven leading western industrial countries (G7) met in Stresa, Italy, to exchange views on current issues. Bundesbank President Joachim Nagel and Federal Minister of Finance Christian Lindner held a joint press conference at which the main focus was on the development of the global economy and trade, but other topics on the agenda were current affairs and interest rate developments.

At the end of December 2022, Germany’s net external assets stood at €2,721 billion, thus amounting to around 70% of nominal gross domestic product (GDP). Both German assets and liabilities vis-à-vis non-residents rose further in 2022.