German balance of payments in November 2021

Rise in current account surplus

Germany’s current account recorded a surplus of €18.9 billion in November 2021, up €1.3 billion on the previous month’s level. The surplus in the goods account declined slightly, but the surplus in invisible current transactions, which comprise services as well as primary and secondary income, increased more strongly. 

In November, the surplus in the goods account fell by €0.3 billion on the month to €13.6 billion because imports of goods recorded a sharper increase than exports.

The surplus in invisible current transactions grew in November by €1.6 billion to €5.3 billion. The main reason for this was the shift in the services account from a deficit to a surplus of €1.6 billion, with lower travel expenditure playing a role in particular. By contrast, the deficit in the secondary income account rose slightly by €0.5 billion to €6.1 billion; this was primarily attributable to higher general government expenditure on current transfers relating to international cooperation. Furthermore, net receipts in the primary income account remained broadly unchanged at €9.8 billion.

Portfolio investment sees outflows

In November 2021, concerns about rising inflation rates and a tightening of monetary policy in the major economies continued to influence the international financial markets. It was against this backdrop that Germany’s cross-border portfolio investment recorded net capital exports of €31.9 billion (after €28.0 billion in October). Domestic investors added, on balance, €27.4 billion worth of securities issued by non-residents to their portfolios, purchasing mutual fund shares (€15.8 billion), bonds (€11.1 billion) and shares (€3.4 billion), but offloading money market paper (€2.9 billion). Foreign investors disposed of German securities to the tune of €4.6 billion net, selling shares (€9.2 billion), bonds (€6.8 billion) and mutual fund shares (€1.0 billion), while purchasing money market paper (€12.5 billion).

In November, the balance of financial derivatives recorded net outflows (€11.4 billion).

Direct investment generated net capital exports of €25.7 billion in November (October: net capital imports of €5.7 billion). Overall, domestic enterprises increased their foreign direct investment by €39.9 billion, with outflows of funds totalling €31.9 billion through the intra-group credit channel. Moreover, domestic firms increased their equity capital in foreign enterprises by €8.0 billion, almost half of which took the form of reinvested earnings. Non-resident enterprises injected their affiliated enterprises in Germany with direct investment funds worth €14.2 billion net. They issued intra-group loans (€12.7 billion) and boosted their equity capital slightly (€1.6 billion).

Other statistically recorded investment – which comprises loans and trade credits (where these do not constitute direct investment), bank deposits and other investments – registered net inflows of capital amounting to €19.5 billion in November (following €19.2 billion in October). Monetary financial institutions (excluding the Bundesbank) recorded net capital imports (€27.3 billion). Transactions by enterprises and households (€10.5 billion) and by general government (€4.3 billion) also led to net inflows of funds from abroad. By contrast, the Bundesbank recorded a rise of €22.6 billion in its net claims. TARGET2 claims on the ECB increased even more strongly (by €60.9 billion). However, non-resident counterparty deposits at the Bundesbank expanded as well.

The Bundesbank’s reserve assets grew slightly – at transaction values – by €1.0 billion in November.