Current account surplus down significantly

Germany’s current account recorded a surplus of €12.5 billion in October 2024, down €8.8 billion on the previous month’s level. This was caused by the smaller surplus in the goods account and especially by the shift to a deficit in invisible current transactions, which comprise services as well as primary and secondary income.

The surplus in the goods account decreased by €2.2 billion to €16.2 billion in October because expenditure increased more sharply than receipts.[1] Invisible current transactions shifted from a surplus of €2.9 billion in September into a deficit of €3.7 billion. This was primarily attributable to the services account, where the deficit grew by €3.7 billion to €11.1 billion. Here, the main contributing factor was the increased expenditure overall, with greater expenditure on travel as well as computer and other business services playing a particular role. Moreover, the deficit on the secondary income account expanded by €1.5 billion to €5.6 billion. Receipts fell, mainly owing to lower general government receipts from current taxes on income and wealth. There was also greater expenditure arising, in particular, from higher general government current transfers relating to international cooperation. On top of this, net receipts in primary income dropped by €1.4 billion to €13.0 billion. Here, the increased expenditure overall was the main dampening factor; higher payments of other investment income to non-residents played a particular role. 

Portfolio investment sees net capital imports

Germany’s cross-border portfolio investment recorded net capital imports of €20.0 billion in October, after net capital exports of €10.6 billion in September. Foreign investors acquired German securities worth €33.4 billion net, purchasing bonds in particular (€29.5 billion) – primarily from the public sector. Furthermore, non-residents purchased German money market paper totalling €6.3 billion. By contrast, these investors sold both shares (€1.4 billion) and mutual fund shares (€1.0 billion). Domestic investors acquired foreign securities to the tune of €13.4 billion net, adding foreign mutual fund shares (€14.1 billion) and shares (€4.0 billion) to their portfolios, whilst offloading money market paper (€3.2 billion) and bonds (€1.5 billion). 

In October, transactions in financial derivatives resulted in net outflows of €5.8 billion (€4.0 billion in September). 

Direct investment generated net capital exports of €1.7 billion in October, down from €15.8 billion in September. German enterprises increased their direct investment funds abroad by €4.8 billion, boosting equity capital by €1.5 billion and also granting additional intra-group loans in the amount of €3.3 billion. Foreign enterprises stocked up their direct investment funds in Germany (€3.2 billion), entirely through additional equity capital on balance (€3.2 billion). Intra-group loans granted to German enterprises declined slightly (€0.1 billion), as repayments slightly outweighed newly granted loan funds. 

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 €13.7 billion in October (following €10.2 billion in September). The net capital exports of enterprises and households (€19.8 billion) were the key factor here. The Bundesbank’s net external claims in the other investment account also declined (€5.9 billion). Here, TARGET claims on the ECB fell by €9.1 billion, whilst, at the same time, the Bundesbank’s external liabilities in the form of currency and deposits also decreased.

The Bundesbank’s reserve assets declined – at transaction values – by €1.4 billion in October.

Footnote:

1. The figures from the foreign trade statistics are a key source of information for compiling the trade in goods in the balance of payments. The figures from the foreign trade statistics were not available in time for compiling the trade in goods for the reporting month of October 2024. As a result, the figures for the trade in goods have been estimated to a greater extent than usual for the reporting month of October 2024.