Economic output in Germany was up in the first quarter of 2025, the Bundesbank writes in its latest Monthly Report. Exports of goods, in particular, but probably also investment and private consumption increased. However, the Bundesbank economists expect the economy to more or less stagnate in the second quarter. This is due to the wide range of burdens that persist and the additional headwinds caused by the tightening of US tariff policy.

At a meeting of the G7 finance ministers and central bank governors, Bundesbank President Joachim Nagel addressed the geopolitical challenges currently being faced. Speaking at a joint press conference with the new Federal Minister of Finance Lars Klingbeil in Banff, Canada, Mr Nagel said that while global economic activity had still been fairly robust at the start of the year, benefiting from the anticipatory effects of announced tariffs, the world economy was now struggling in the face of tightened US tariff policies and great uncertainty.

This year’s Bundesbank symposium “Banking supervision in dialogue” focused on geopolitical risks, artificial intelligence and streamlining bureaucracy. Bundesbank Executive Board member Michael Theurer believes it is important to have a nuanced debate on regulation in order to increase efficiency and reduce “red tape” without lowering standards. The industry meeting in Frankfurt was attended by around 450 supervisors and banking industry representatives.

Chemnitz is the European Capital of Culture 2025. To mark the occasion, the Regional Office in Saxony and Thuringia is organising a range of events at the Bundesbank’s Chemnitz branch. In addition to a coin exhibition and an art exhibition, there will be a panel discussion with Bundesbank Executive Board member Burkard Balz. 

“This is one of the most important Spring Meetings,” Bundesbank President Joachim Nagel said at a press breakfast with Germany’s acting Federal Finance Minister Jörg Kukies on the occasion of the Spring Meetings of the International Monetary Fund (IMF) and the World Bank. “We know what we’ve got, and what we’ve had, with the IMF and the World Bank. Multilateralism is a core element of the global economic order.”

“Economic output in Germany is likely to have increased slightly in the first quarter of 2025, but could suffer a setback in the second quarter,” the Bundesbank writes in its latest Monthly Report. Construction and industrial output, for instance, were up recently. Retail sales also continued to grow in January and February. However, according to the Bundesbank’s economists, the outlook for the second quarter is gloomy, not least given the US administration’s tariff policy.

Between 2021 and 2023, the average amount of wealth per household in Germany grew slightly in nominal terms, but declined in real terms, i.e. when adjusted for inflation. This is the finding of a Bundesbank study that regularly examines household wealth and finances. Nevertheless, net wealth remains at a higher level in both nominal and real terms than in 2017, when the Bundesbank carried out its last survey before the COVID-19 pandemic.

“The better society is informed about financial topics, the better we, as central banks, can explain our monetary policy decisions,” Bundesbank President Joachim Nagel said at the opening of the Bundesbank’s euro pavilion. This converted event space at the Bundesbank’s Central Office in the heart of Frankfurt adds to the Bank’s existing outreach activities to engage and interact with interested members of the general public.

How does central bank communication affect the economy? Artificial intelligence provides new insights: the Monetary-Intelligent Language Agent (MILA) model developed at the Bundesbank analyses monetary policy statements and assesses the signals they send out – from restrictive to accommodative. This presents promising opportunities for better shaping monetary policy messaging. But AI-assisted analyses also pose inherent risks, such as diminishing diversity of opinion.

According to the current Monthly Report, access to cash in Germany is currently largely secure despite the progressive reduction in ATMs and bank branches. For example, the majority of the population has access to an ATM or bank counter within five kilometres, although urban areas are noticeably better served than rural areas. The Bank’s experts write that, in order for the freedom of choice between cash and digital means of payment to endure, infrastructure for the supply of cash must remain intact in future.