Sharp decrease in current account surplus

Germany’s current account recorded a surplus of €9.6 billion in May 2025, virtually half the level seen in the preceding month. This was mainly attributable to the swing to a deficit in invisible current transactions, which comprise services as well as primary and secondary income. There was also a somewhat smaller surplus in goods trading. 

In May, the surplus in the goods account fell by €0.9 billion to €14.5 billion because receipts recorded a sharper decline than expenditure. The continued contraction in exports to the United States was a major contributor to the fall in exports overall. Exports to the United States had risen sharply in the months before due to front-loading effects in the run-up to tariff announcements by the US administration, and this likely also played a role.

Invisible current transactions shifted from a surplus of €3.5 billion in April into a deficit of €4.9 billion, a key factor being that net receipts in primary income fell by €11.7 billion to €2.7 billion. This was largely due to a rise in dividend payments to non-residents for their portfolio investment, as typically occurs in May. Dividend payments also increased general government tax revenue from non-residents and were instrumental in reducing the deficit in secondary income by €2.2 billion to €2.4 billion. Furthermore, the deficit in the services account narrowed by €1.1 billion to €5.2 billion. Both sides of the balance sheet broadly posted predominantly slight declines. Overall, expenditure fell more sharply than income, with markedly lower expenditure on other business services making a contribution.

Higher net capital exports

German net capital exports were higher in May than in the previous month (€29.1 billion, after €18.6 billion in April).

Direct investment generated net capital imports of €7.2 billion in May, up from €0.6 billion in April. Foreign enterprises provided their German affiliates with additional direct investment funds (€9.4 billion), decisively in the form of additional intra-group loans amounting to €9.5 billion. Their equity capital in Germany remained virtually unchanged (-€0.1 billion). German enterprises stepped up their foreign direct investment by €2.2 billion augmenting their equity capital by €11.5 billion. By contrast, they scaled back lending to affiliates abroad by €9.2 billion. 

Germany’s cross-border portfolio investment recorded net capital exports of €15.6 billion in May (after €15.0 billion in April). Domestic investors added €43.5 billion worth of securities issued by non-residents to their portfolios on balance, purchasing foreign bonds (€21.8 billion), mutual fund shares (€12.4 billion), shares (€8.0 billion) and money market paper (€1.3 billion). Foreign investors acquired German securities worth €28.0 billion net, purchasing German bonds (€25.6 billion) and money market paper (€4.5 billion). By contrast, they parted with shares (€2.1 billion) and mutual fund shares (€0.1 billion). 

In May, transactions in financial derivatives resulted in net outflows of €6.6 billion (following €2.8 billion in April). 

Other statistically recorded investment – which comprises loans and trade credits (where these do not constitute direct investment), bank deposits and other investments – registered net capital exports amounting to €13.5 billion in May (following €0.9 billion in April). This was mainly due to net capital exports by monetary financial institutions excluding the Bundesbank (€27.5 billion) and by enterprises and households (€4.6 billion). General government recorded net capital imports in other investment; these amounted to €1.2 billion. Bundesbank account transactions also recorded net capital imports (€17.4 billion), with the Bundesbank’s TARGET claims on the ECB decreasing by €8.4 billion. Furthermore, the Bundesbank’s external liabilities in the form of currency and deposits rose.

The Bundesbank’s reserve assets grew – at transaction values – by €0.6 billion in May.