International trade in services refers to the exchange of intangible services such as financial services, tourism or IT between countries. Unlike in goods trade, no physical goods are exchanged. Globalisation, technological developments and the opening-up of markets have greatly increased its importance.

January 2026 saw the EU conclude two major trade agreements – with the Mercosur countries and with India – culminating many years of negotiations. These agreements largely eliminate trade barriers and could, over the long run, help diversify the EU’s trade relations. Ratification of the two deals is still pending, however. Writing in the latest Monthly Report, Bundesbank experts illuminate the main features of the trade agreements and explore their potential economic impact.

It is often said that wage moderation in Germany was the primary cause of the current account imbalances in the euro area that emerged prior to the financial crisis. A new study puts this hypothesis to the test.

German enterprises constitute net debtors vis-à-vis non-residents: Standing at €1754 billion at the end of January 2026, their liabilities arising from financial operations and trade credits, exceeded their corresponding assets of €1494 billion by €260 billion. Compared with the previous month, this is a change of -€19 billion.

Following significant GDP growth in the previous quarter, the German economy is likely to stagnate in the first quarter of 2026 in seasonally adjusted terms, according to the March issue of the Bundesbank’s Monthly Report. Industry’s weak competitive position, continued low capacity utilisation and a lag in the impact of government stimuli are dampening developments. The Middle East conflict is a source of additional burdens, especially as a result of rising energy prices, and these factors are keeping the inflation outlook particularly uncertain at present.

The balance of payments records all economic transactions between residents and non-residents within a given time period and thus shows a country’s complex economics links with the rest of the world.