Current account surplus down

Germany’s current account recorded a surplus of €14.4 billion in August 2024, down €3.3 billion on the previous month’s level. This was chiefly attributable to a smaller goods account surplus.

In August, the surplus in the goods account fell by €3.5 billion to €17.6 billion because receipts recorded a sharper decline than expenditure. The deficit in invisible current transactions decreased slightly by €0.2 billion to €3.2 billion. Small changes were also recorded in the sub-account balances. Net receipts in primary income rose by €0.5 billion to €12.9 billion. In the secondary income account, the deficit narrowed somewhat to €5.2 billion. In both sub-accounts, the individual sub-items changed only slightly, with declines predominating and expenditure falling somewhat more sharply than receipts on balance. The deficit in the services account widened by €0.5 billion to stand at €10.9 billion. Here, too, receipts were down overall, with receipts from other business services and charges for the use of intellectual property decreasing above all. Although declines in these areas in particular as well as lower expenditure on computer services also depressed the expenditure side, the increase in travel expenditure – typical for this time of year – contributed substantially to expenditure narrowing less strongly than receipts on balance.

Portfolio investment sees net capital imports

Germany’s cross-border portfolio investment recorded net capital imports of €28.6 billion in August, after net capital exports of €8.7 billion in July. Foreign investors acquired German securities worth €48.4 billion net, purchasing bonds in particular (€39.7 billion), which were roughly split evenly between instruments issued by the public and private sectors. In addition, they bought money market paper (€7.8 billion) and, to a lesser extent, mutual fund shares (€0.6 billion) and shares (€0.3 billion). Domestic investors acquired foreign securities to the tune of €19.8 billion net, adding foreign bonds (€10.8 billion), mutual fund shares (€9.8 billion) and shares (€0.7 billion) to their portfolios, but disposing of money market paper (€1.5 billion).

In August, transactions in financial derivatives resulted in net outflows of €7.5 billion (€5.9 billion in July).

Direct investment generated net capital imports of €5.7 billion in August, up from €1.0 billion in July. German enterprises decreased their direct investment funds abroad by €10.3 billion. Although they increased their equity capital abroad by €1.2 billion, redemptions predominated in intra-group credit transactions (€11.5 billion). Non-resident enterprises, meanwhile, withdrew €4.6 billion in direct investment from Germany. This was chiefly attributable to redemptions in intra-group credit transactions (€5.9 billion), which more than offset inflows in the form of equity capital (€1.3 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 outflows of capital amounting to €12.3 billion in August (following €28.8 billion in July). The higher net claims of monetary financial institutions amounting to €16.4 billion made a particularly large contribution to this figure. The Bundesbank’s net external claims also rose (€8.3 billion), due to TARGET claims on the ECB rising by €26.8 billion. However, the Bundesbank’s external liabilities in the form of currency and deposits also increased at the same time. Enterprises and households (€11.4 billion) and general government (€1.0 billion) recorded net capital imports in August.

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