Despite the impact of the coronavirus pandemic, euro area enterprises and households have not seen their debt situation deteriorate significantly. This is the conclusion reached by Bundesbank experts after examining developments in greater detail. “The expected normalisation of monetary policy will probably not unduly exacerbate the debt situation of non-financial corporations and households,” they also note in the current edition of the Bank’s Monthly Report

The German current account recorded a surplus of €30.2 billion in March 2021, up €11.5 billion on the previous month’s level. This was due to a considerable increase in the surplus on invisible current transactions, which comprise not only services but also primary and secondary income, as well as that in the goods account.

Outlook for the German economy – macroeconomic projections for 2015 and 2016

Times of strong growth and low interest rates have seen vulnerabilities build up in the German financial system. In addition, the probability of an economic downturn has increased. “Now is the time to build up sufficient capital and strengthen the financial system’s defences,” said Bundesbank Vice-President Claudia Buch at the press conference on the publication of the new Financial Stability Review.