Rise in current account surplus

Germany’s current account recorded a surplus of €22.6 billion in September 2024, up €5.5 billion on the previous month’s level. This was caused by the 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.

In September, the surplus in the goods account rose by €1.1 billion to €19.6 billion because receipts recorded a sharper increase than expenditure. Invisible current transactions shifted from a deficit of €1.4 billion in August into a surplus of €3.0 billion. This was mainly due to the deficit in the services account contracting by €3.4 billion to €7.4 billion. Total receipts for this account increased, with higher receipts from business services and from charges for the use of intellectual property playing a significant role. In addition, expenditure declined, partly because travel expenditure and expenditure on charges for the use of intellectual property decreased. In the secondary income account, the deficit narrowed by €1.0 billion to €4.0 billion, with higher general government revenue from current taxes on income and wealth, in particular, playing a role. Net receipts in the primary income balance remained virtually unchanged at €14.3 billion.

Portfolio investment sees net capital exports

Germany’s cross-border portfolio investment recorded net capital exports of €7.7 billion in September, after net capital imports of €6.8 billion in August. Domestic investors acquired foreign securities to the tune of €27.3 billion net, adding foreign bonds (€17.3 billion), mutual fund shares (€6.2 billion), shares (€3.0 billion) and, to a lesser extent, money market paper (€0.8 billion) to their portfolios. Foreign investors acquired German securities worth €19.6 billion net. They purchased bonds in particular (€9.5 billion), showing a slight preference for public bonds over private sector bonds. In addition, non-resident investors bought German money market paper (€9.4 billion) and shares (€1.9 billion), but disposed of German mutual fund shares amounting to €1.1 billion on balance.

In September, transactions in financial derivatives resulted in net outflows of €4.6 billion (€7.9 billion in August).

Direct investment generated net capital exports of €17.2 billion in September (following net capital imports of €4.9 billion in August). German enterprises increased their direct investment funds abroad by €33.4 billion, boosting equity capital by €12.8 billion and also granting additional intra-group loans in the amount of €20.7 billion. Foreign enterprises stocked up their direct investment funds in Germany (€16.2 billion). They increased their equity capital in German subsidiaries by €3.1 billion and granted additional intra-group loans worth €13.1 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 €0.7 billion in September (following €12.5 billion in August). This was chiefly attributable to the net capital exports of enterprises and households (€10.0 billion) and of general government, to a lesser extent (€0.2 billion). By contrast, monetary financial institutions (excluding the Bundesbank) recorded net capital imports (€5.1 billion). The Bundesbank’s net external claims also declined (€4.4 billion). Here, TARGET claims on the ECB fell by €1.7 billion, whilst at the same time, the Bundesbank’s external liabilities in the form of currency and deposits increased.

The Bundesbank’s reserve assets rose – at transaction values – by €0.9 billion in September.