Germany’s current account recorded a surplus of €2.5 billion in May 2022, down €6.4 billion on the previous month’s level. Although the surplus in the goods account increased, this was outweighed by the sharp shift into a deficit for invisible current transactions, which comprise services as well as primary and secondary income.

German economic output contracted in the final quarter of 2023, according to the February Monthly Report. Weak demand from abroad was still putting a strain on industry, while higher financing costs continued to dampen investment. Bundesbank economists believe that uncertainty about transformation and climate policy is also likely to have weighed on economic activity. Some headwinds will probably persist into the first quarter of 2024 as well. Economic output could therefore decline again somewhat.