Households’ financial assets fell by €98 billion in the second quarter of 2022 and thus for the second time in succession. At the end of the quarter they stood at €7,496 billion.

Germany’s current account posted a surplus of €5.0 billion in July 2022, down €9.3 billion on the previous month’s level. This was primarily caused by the shift into a deficit in invisible current transactions, which comprise services as well as primary and secondary income. There was also a smaller surplus in goods trading.

Contrary to expectations, German economic activity expanded in the third quarter of 2022, the Bundesbank writes in its current Monthly Report. Despite high inflation and uncertainty about future energy supply, real gross domestic product surpassed its pre-pandemic level for the first time. However, the Bundesbank’s experts believe that downward forces are likely to clearly predominate in the coming months. They still expect the German economy to enter a recession in the final quarter of 2022 and the first quarter of 2023, though the scale of the recession is extremely uncertain. “Double-digit inflation could even persist into the new year,” the report states.

The Bank for International Settlements believes that the current economic upswing offers an opportunity to strengthen economic resilience. According to its latest Annual Report, this is the key to reaping the benefits of globalisation.

In the view of Bundesbank President Jens Weidmann, the ECB Governing Council’s forward guidance has contributed to lowering long-term interest rates and stimulating the euro area economy. However, at the 2019 European Banking Congress in Frankfurt, he also highlighted the risks and side effects of a highly expansionary monetary policy. ECB President Christine Lagarde called for increased public investment.