Germany’s current account recorded a surplus of €30.8 billion in November 2023, up €10.8 billion on the previous month’s level. This was primarily caused by the shift into a surplus in invisible current transactions, which comprise services as well as primary and secondary income. Moreover, the surplus in the goods account increased.

Vice-President Claudia M. Buch points out that an unexpected economic downturn could be amplified if the banking sector deleverages to maintain capital ratios. Hence, “banks must maintain capital buffers designed to absorb losses and thereby stabilizing lending”, Buch stated at an event in Dublin. 

Bundesbank President Joachim Nagel has once again advocated making a timely start on normalising policy rates in the euro area. The risk of acting too late is increasing notably, he said at a conference in Eltville am Rhein. “As inflation in the euro area continues to run high, we need to act,” Mr Nagel urged. “And if both the incoming data and our new projection confirm this view in June, I will advocate a first step [towards] normalising ECB (European Central Bank) interest rates in July.”

Germany’s current account recorded a surplus of €31.4 billion in December 2023, up €0.9 billion on the previous month’s level. While the surplus in the goods account decreased, the surplus in in-visible current transactions, which comprise services as well as primary and secondary income, ex-perienced a stronger increase. 

“The impact of Russia’s attack on Ukraine is likely to place a noticeable strain on economic activity in Germany from March,” the Bundesbank writes in its Monthly Report. Energy commodity prices have surged which will probably put a damper on household consumption and the production of energy-intensive industries. Together with the looming disruptions to foreign trade and supply chains and the heightened uncertainty, the consequences of the war are likely to slow the economic recovery originally expected by a significant degree.

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Households’ financial assets grew by €161 billion to €7,618 billion in the fourth quarter of 2021. Taking all transactions and valuation effects into account, growth was thus significantly higher than in the (weak) third quarter.