Steep rise in current account surplus

Germany’s current account recorded a surplus of €24.1 billion in November 2024, up €10.4 billion on the previous month’s level. This was caused by a larger surplus in the goods account and especially by the shift to a surplus in invisible current transactions, which comprise services as well as primary and secondary income.

The surplus in the goods account grew by €3.9 billion to €19.5 billion in the reporting month because expenditure fell more sharply than receipts. Invisible current transactions shifted from a deficit of €1.8 billion in November into a surplus of €4.7 billion. The crucial factor was that the deficit in the services account contracted by €5.3 billion to €6.0 billion. The seasonal decline in travel expenditure played the key role here. Moreover, net receipts in primary income rose by €1.3 billion to €16.6 billion. This was mainly due to the overall increase in receipts, especially the rise in residents’ income from investment fund shares and portfolio investment abroad. The deficit in secondary income remained virtually unchanged at €5.9 billion, compared with €5.8 billion in the previous month.

Portfolio investment sees net capital imports

Germany’s cross-border portfolio investment recorded net capital imports of €14.1 billion in November (after €17.2 billion in October). Foreign investors acquired German securities worth €26.2 billion net, purchasing bonds in particular (€19.1 billion) – these were exclusively public bonds on balance. Furthermore, non-residents purchased German money market paper totalling €8.5 billion. By contrast, these investors sold both shares (€0.8 billion) and mutual fund shares (€0.6 billion). Domestic investors acquired foreign securities to the tune of €12.2 billion net. They added foreign mutual fund shares (€14.6 billion) and bonds (€5.1 billion) to their portfolios, but parted with shares (€5.0 billion) and money market paper (€2.5 billion). 

In November, transactions in financial derivatives resulted in net outflows of €2.4 billion (€5.8 billion in October). 

Direct investment generated net capital exports of €3.2 billion in November, down from €4.8 billion in October. German enterprises increased their direct investment funds abroad by €0.5 billion, boosting equity capital by €8.2 billion but scaling back cross-border intra-group lending by €7.7 billion. Foreign enterprises reduced their direct investment in Germany by €2.6 billion. This was due to the fact that redemptions outweighed new intragroup loans (by €3.8 billion). By contrast, foreign enterprises stepped up their equity stakes in German enterprises by €1.1 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 €33.2 billion in November (following €12.6 billion in October). The net capital exports of enterprises and households (€32.3 billion) were the key factor here. The Bundesbank’s net external claims in the other investment account also rose (€6.9 billion). Here, TARGET claims on the ECB increased by €2.1 billion, whilst the Bundesbank’s external liabilities in the form of currency and deposits decreased. Transactions by other monetary financial institutions (€5.7 billion) and general government (€0.2 billion) gave rise to net capital imports in the other investment account.

The Bundesbank’s reserve assets rose – at transaction values – by €1.7 billion in November.