Sharp decrease in current account surplus

Germany’s current account recorded a surplus of €11.8 billion in January 2025, down €9.1 billion on the previous month’s level. This was attributable to a lower surplus in the goods account and especially in invisible current transactions, which comprises services as well as primary and secondary income.

The surplus in the goods account fell by €1.3 billion to €9.2 billion in January because expenditure increased more sharply than receipts. The surplus in invisible current transactions declined by €7.9 billion to €2.6 billion. Net receipts in primary income decreased by €5.5 billion to €14.1 billion. This was mainly attributable to the countermovement on the revenue side to the EU agricultural subsidies that were paid out to Germany in December 2024. In addition, in investment income receipts declined more sharply than expenditure. Moreover, the deficit in the services account expanded by €5.5 billion to €6.0 billion. Receipts fell more sharply overall than expenditure, chiefly due to computer services and other business services. Net expenditure on travel also increased. By contrast, the deficit in the secondary income account narrowed by just €3.1 billion to €5.5 billion. In particular, lower general government payments for current transfers relating to international cooperation and smaller payments to the EU budget in connection with financing related to gross national income played a role here.   

Net capital exports down

In line with the decline in the current account surplus, German net capital exports were also down in January compared with the previous month (€14.6 billion, following €44.5 billion in December 2024).

Direct investment generated net capital imports of €3.6 billion in January (following net capital exports of €18.8 billion in December 2024). Foreign enterprises provided their German affiliates with additional direct investment funds (€16.4 billion), issuing additional intra-group loans to the tune of €12.9 billion and raising their equity capital by €3.5 billion. German enterprises stepped up their foreign direct investment by €12.8 billion, boosting equity capital by €9.0 billion and increasing the lending volume to affiliates by €3.8 billion. 

Germany’s cross-border portfolio investment recorded net capital exports of €15.7 billion in January (after €30.6 billion in December 2024). Domestic investors added €51.3 billion worth of securities issued by non-residents to their portfolios on balance. They purchased foreign bonds (€25.1 billion), mutual fund shares (€20.3 billion) and shares (€6.2 billion), while selling money market paper (€0.4 billion). Foreign investors acquired German securities worth €35.5 billion net, primarily buying bonds (€41.3 billion) as well as a modest volume of shares (€0.9 billion) and mutual fund shares (€0.1 billion). By contrast, they disposed of money market paper (€6.8 billion).

In January, transactions in financial derivatives resulted in net outflows of €3.8 billion (after inflows of €0.8 billion in December 2024). 

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 €2.5 billion in January (following €2.1 billion in December 2024). Bundesbank account transactions recorded net capital exports (€61.5 billion), with its TARGET claims on the ECB increasing by €21.7 billion, while the Bundesbank’s external liabilities in the form of currency and deposits decreased significantly, as is often the case at the start of the year. By contrast, the other investment account recorded net capital imports of €85.5 billion from cross-border transactions by other monetary financial institutions. Furthermore, general government also recorded net inflows of capital (€0.8 billion). Transactions by enterprises and households led to net capital exports (€22.2 billion).

The Bundesbank’s reserve assets rose – at transaction values – by €1.2 billion in January.