The German economy is under considerable pressure to adapt, writes the Bundesbank in its September Monthly Report. Challenges are arising mainly from demographic change and the transition to a low-emission energy supply. Moreover, dependency on China for the procurement of key intermediate inputs entails risk. In the midset of the current debate concerning Germany’s alleged status as the “sick man of Europe”, the Bundesbank still sees the German economy as well positioned. According to our analyses, broad-based deindustrialisation is not on the table either, says Marcus Jüppner, co-author of the report. 

German credit institutions’ performance tended to deteriorate in 2022, Bundesbank experts write in the current issue of the Monthly Report. Profit for the financial year before tax did manage to creep up on the whole and, at €27.4 billion, remained well above the long-term average. However, this was driven mainly by a one-off effect at one institution. According to the Bundesbank, most categories of banks recorded significantly lower annual profit for the reporting year than in 2021.