Between 2021 and 2023, the average amount of wealth per household in Germany grew slightly in nominal terms, but declined in real terms, i.e. when adjusted for inflation. This is the finding of a Bundesbank study that regularly examines household wealth and finances. Nevertheless, net wealth remains at a higher level in both nominal and real terms than in 2017, when the Bundesbank carried out its last survey before the COVID-19 pandemic.

“The better society is informed about financial topics, the better we, as central banks, can explain our monetary policy decisions,” Bundesbank President Joachim Nagel said at the opening of the Bundesbank’s euro pavilion. This converted event space at the Bundesbank’s Central Office in the heart of Frankfurt adds to the Bank’s existing outreach activities to engage and interact with interested members of the general public.

How does central bank communication affect the economy? Artificial intelligence provides new insights: the Monetary-Intelligent Language Agent (MILA) model developed at the Bundesbank analyses monetary policy statements and assesses the signals they send out – from restrictive to accommodative. This presents promising opportunities for better shaping monetary policy messaging. But AI-assisted analyses also pose inherent risks, such as diminishing diversity of opinion.

According to the current Monthly Report, access to cash in Germany is currently largely secure despite the progressive reduction in ATMs and bank branches. For example, the majority of the population has access to an ATM or bank counter within five kilometres, although urban areas are noticeably better served than rural areas. The Bank’s experts write that, in order for the freedom of choice between cash and digital means of payment to endure, infrastructure for the supply of cash must remain intact in future. 

Freedom of choice when making payments must be maintained. Bundesbank Executive Board member Burkhard Balz, Finance Minister of the state of Baden-Württemberg Danyal Bayaz and Martin Dallmeier, Deputy Chairman of the Board at dm-drogerie markt were all in agreement about this. At the launch of the new Bits & Bargeld event series in Heidelberg, they discussed cash, payments and the digital euro. Sissi Hajtmanek moderated the evening’s proceedings.

Germany is facing major challenges. Smart, consistent and reliable economic policy could set out the framework and unleash the sense of change we now need, Bundesbank President Joachim Nagel commented. In a speech at the Berlin School of Economics, Mr Nagel presented twelve points that he believes are key to boosting growth in Germany. For each set of topics, he examined four points: for an increased supply of labour, for the necessary transition towards net zero, and for a more dynamic corporate sector.

The Bundesbank is expanding its reform proposals for central government’s debt brake. With regard to the debt ratio, Germany is doing well by international standards. Our reform proposal for the debt brake preserves sound public finances whilst at the same time facilitating urgently needed investment, Bundesbank President Joachim Nagel said. The concept supports measures needed to strengthen infrastructure and defence whilst ensuring sustainable public finances over the long term, in line with European rules.

As in 2023, the monetary policy measures of the past few years shaped the Bundesbank’s annual accounts in the 2024 financial year. It recorded an accumulated loss of €19.2 billion for the reporting year, Bundesbank President Joachim Nagel and First Deputy Governor Sabine Mauderer said at the press conference presenting the Bank’s annual accounts. The Bundesbank has a sound balance sheet, Mr Nagel stressed, explaining that the value of its revaluation reserves was many times greater than the current and prospective accumulated losses.

According to the current issue of the Bundesbank’s Monthly Report, German economic output fell surprisingly significantly in the fourth quarter of 2024. The main reasons for this were declining exports and weak industrial output, especially in the automotive sector, while private and government consumption expenditure rose. The labour market outlook also suggests a continued cooldown.

The Bundesbank registered roughly 72,400 counterfeit euro banknotes in German payments in 2024. Thus, the number of counterfeits was up by 28 % compared with the previous year. At the same time, however, the loss arising from counterfeiting went down. Overall, the incidence of counterfeit money remains moderate in scale: statistically speaking, in 2024 there were nine counterfeit banknotes per 10,000 inhabitants, said Burkhard Balz, member of the Bundesbank’s Executive Board.