At the end of 2024, Germany’s net external assets totalled €3,452 billion, thus amounting to around 80 % of the country’s nominal gross domestic product (GDP). Overall, both assets and liabilities vis-à-vis non-residents rose further in 2024.This was the case for all items in the sub-accounts of the international investment position. Claims and liabilities from cross-border portfolio investment and other investment recorded significant increases. In addition, corporate ties resulting from direct investment by German investors, the Bundesbank’s reserve assets, and holdings of financial derivatives and employee options also increased last year. Overall, Germany’s net external assets at the end of 2024 were €555 billion higher than at the end of 2023. Just under one-half of this amount was attributable to transactions that led to net capital exports in the balance of payments. The remaining growth was due to valuation effects and other adjustments.

Net external assets rise steeply on the year

At the end of 2024, Germany’s net external assets totalled €3,452 billion. This was just over 80 % of Germany’s nominal GDP in 2024 and meant that this ratio increased by 11 percentage points on the year. In 2024, the German net external asset position rose by around €555 billion in absolute terms. The cross-border transactions recorded in the financial account resulted in net capital exports of €262 billion last year. They therefore slightly exceeded Germany’s current account surplus. Non-transaction-related changes boosted the increase by a further €293 billion. On balance, this was due to large other adjustments and, to a somewhat lesser extent, the effects of exchange rate and market price developments.¹

Germany’s claims on non-residents were up on the year by €1,248 billion (or 9.9 %) to €13,852 billion; liabilities rose by €693 billion (or 7.1 %) to €10,399 billion. Claims mainly reflected transaction-related changes (€502 billion), i.e. asset purchases, as well as similarly high market price effects (€495 billion). In addition, exchange rate effects and other adjustments increased the stock of assets. The significant positive exchange rate effect, particularly in the case of securities and direct investment, was mainly due to the appreciation of the US dollar and the pound sterling in the reporting year, which outweighed the effects of the depreciation of other individual currencies against the euro. The nominal effective exchange rate of the euro² fell by 1.8 % over the course of 2024.³ To the extent that German assets were recorded abroad in foreign currency, their value tended to increase in euro terms. 

The increase in German external liabilities by €693 billion to €10,399 billion was mainly attributable to market price effects (€456 billion). One factor that is likely to have played a role here is that market participants expected key interest rates to fall as annual inflation comes ever closer to the 2 % target. Transaction-related changes accounted for just over one-half of the market price effect. Exchange rate effects and other adjustments were significantly smaller and were more or less offset.

Further expansion in direct investment

On balance, Germany’s net direct investment at the end of 2024 amounted to around €932 billion. It was thus €84 billion higher than at the end of 2023. The higher balance was driven by an increase in cross-border corporate ties involving German investors. This was true of both German direct investment abroad and foreign investment in Germany.

German direct investment abroad was up on the year by a total of €134 billion (4.6 %) to €3,058 billion. Transactions accounted for slightly more than one-half of this increase (€74 billion). German investors increased their equity capital in enterprises abroad and, to a much lesser extent, their FDI loans too. In valuation effects, the effective depreciation of the euro exchange rate as well as – to a lesser extent – other adjustments impacted on Germany’s foreign direct investment stocks. Market price effects only slightly increased the stock of German foreign direct investment. 

Non-residents enterprises’ direct investment holdings in Germany rose by €51 billion (2.4 %) to €2,126 billion in 2024, mainly driven by transactions. Non-resident investors augmented their equity capital in German enterprises in particular, and granted a small amount of additional  intra-group loans to domestic enterprises. 

Surplus in portfolio investment significantly higher than in the previous year

At €1,034 billion, the portfolio investment balance at the end of 2024 was around €204 billion higher than in the previous year. Securities claims on non-residents considerably outpaced the corresponding liabilities.⁴

At the end of 2024, resident investors held foreign securities totalling €4,573 billion, up by €541 billion (or 13.4 %) on the previous year. The increase in net purchases of foreign securities, for one thing, was behind the increase. Money market funds and other foreign investment fund shares were most in demand. In addition, there were bonds issued by financial corporations and bank debt securities. The impact of valuation effects was similar to that of transactions. The positive market price effects were particularly prominent for equity and investment fund shares. The relative weakness of the euro additionally contributed to positive exchange rate effects, and other adjustments also had a positive impact on the assets side. 

At the end of 2024, non-resident investors held €337 billion (or 10.5 %) more German securities in their portfolios than at the end of 2023, totalling €3,539 billion. This was attributable in roughly equal part to securities transactions (€188 billion) and market price effects (€181 billion). Foreign portfolio investors were particularly interested in German public bonds. One reason for this was presumably that foreign investors replenished their holdings of German government bonds, which had been scaled back significantly in previous years. Greater issuance activity in the public sector also played a role. Non-residents, on the other hand, sold small amounts of domestic short-term debt securities. The positive market price effect was largely attributable to increases in the prices of German shares in foreign portfolios (€168 billion). This is consistent with the significantly positive development of the German stock index over the course of 2024. Exchange rate effects are generally of minor importance for German external liabilities, as these are predominantly denominated in euro. Other adjustments, which, taken in isolation, reduced Germany’s external liabilities, had a stronger impact. 

Increased positive balance for financial derivatives and employee stock options

At the end of 2024, holdings of financial derivatives and employee stock options registered a positive balance of €50 billion. This was again significantly more than in the previous year (€27 billion). Options transactions were the main contributor to this increase.⁵ The balance of futures trading in electricity and gas also played a role, albeit to a lesser extent. Its significance had already lessened back in 2023, after Russia’s war of aggression against Ukraine had triggered severe disruptions in the energy markets and temporarily brought about considerable net capital exports in forward and futures contracts relating to electricity and gas in 2022. 

Other investment: Net claims higher

In other investment – comprising loans and trade credits (where these do not constitute direct investment) as well as currency and deposits amongst others – Germany’s positive net asset position rose by €173 billion on the year, bringing it up to €1,073 billion at the end of 2024. In 2024, claims on non-residents arising from other investment had risen by €203 billion, or 5.2 %, to €4,072 billion across all sectors. External liabilities rose less steeply; they stood at €2,998 billion at year-end 2024, up €30 billion, or 1.0 %, on the year.

The increase in the overall balance of other investment was driven by the positions of monetary financial institutions (excluding the central bank). These increased their holdings of currency and deposits abroad, in particular, and granted additional loans to non-residents. In addition, positive exchange rate effects increased holdings in these two segments, resulting in growth of €188 billion on balance. Non-residents’ deposits increased the liabilities of German monetary financial institutions (excluding the Bundesbank) by €65 billion. Overall, the balance of monetary financial institutions (excluding the central bank) in other investment rose by €123 billion in 2024. 

The Bundesbank’s net external position in other investment rose by €2 billion in 2024. The Bundesbank’s external claims fell by €55 billion, mainly due to its lower TARGET balance vis-à-vis the ECB.⁶ At the same time, the Bundesbank’s external liabilities in other investment fell somewhat more sharply again. This was due to counterparties outside the euro area, in particular, scaling back their deposits with the Bundesbank.

General government’s other foreign investment fell by €8 billion in 2024. This was mainly attributable to lower deposits with foreign institutions. By contrast, other investment by enterprises and households swelled by €56 billion on balance. 

Further increase in reserve assets

The Bundesbank’s reserve assets amounted to €364 billion at the end of 2024, and were therefore up by €71 billion on the previous year. Reserve asset holdings rose on the back of positive market price effects, in particular (€70 billion), with the rise in the price of gold dominating. Taken in isolation, the depreciation of the euro against the US dollar and other important currencies increased the value of reserve assets by €4 billion. Transactions reduced Germany’s reserve assets slightly, by €1 billion.

Endnotes

¹ Non-transaction-related changes include valuation effects as a result of exchange rate or market price movements and other adjustments. Other adjustments include, for instance, write-downs on uncollectable credit claims, changes in sector classifications, changes in the functional category of a financing instrument, as well as statistical discrepancies between the international investment position and the balance of payments due to differing data sources, for example.

² The nominal effective exchange rate comprises the weighted exchange rates of the 18 trading partners most important to the euro area economy (expanded group of countries for which the effective exchange rate (EER) of the EU is calculated).

³ The fact that the Eurosystem lowered key interest rates was also a factor.

⁴ For more information on transactions in portfolio investment, see Deutsche Bundesbank, German balance of payments in 2024, Monthly Report, March 2025.

⁵ This was mainly due to compensatory intra-group transactions in the form of over-the-counter options for transactions in structured short and long-term debt securities from German issuers. See Deutsche Bundesbank (2021), German balance of payments in 2020, Monthly Report, March 2021, pp. 17‑42.

⁶ In 2024, TARGET claims on the ECB fell by €47 billion, which was less than in 2023 (€175½ billion). This is because the winding-down of monetary policy securities portfolios in the context of tighter monetary policy has not reduced stocks of German TARGET claims since  mid-2023 as significantly as they had previously risen when the balance sheet was being built up under the asset purchase programmes. One reason for this appears to be a change in investor behaviour in the market for euro-denominated government bonds. For more information, see Deutsche Bundesbank, German balance of payments in 2024, Monthly Report, March 2025.