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Germanys current account: The end of criticism

July 21, 2022
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Germany's current account is in flux. Currently, the "terms of trade" shock is reducing the surplus in the goods balance. But structural factors such as the reduced importance of industry and demographics also point to lower surpluses. In addition, we expect a further narrowing of the deficits in the services balance. The surpluses from the primary and secondary balance, on the other hand, are likely to increase further. In total, the current account ratio will fall sharply in 2022, especially measured in terms of GDP, and will also tend to be significantly lower than in the past thereafter. Accordingly, criticism of Germany's surpluses is likely to become increasingly muted. [more]

More documents contained in "Chart in Focus"

60 Documents
June 12, 2023
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2
Electric heat pumps are becoming increasingly popular with German homebuilders. In 2022, they already supplied the primary heating energy in more than half of all homes in new buildings. In the 1st quarter of 2023, this share even rose to 55%. Thus, heat pumps have taken over the market leadership in a short time. An important reason for the rapid growth of their market share is government subsidies, which can account for up to 40% of the total cost. [more]
March 3, 2023
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3
London continues to be the leading trading hub for OTC interest rate derivatives with a market share of 46% and an average daily turnover of USD 2.6 tr. However, the UK has lost ground since 2019 when its market share was still 51%. This is due to the transition away from Libor as well as the ongoing efforts of EU authorities to bring more derivatives clearing into the bloc. [more]
March 1, 2023
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5
We calculate a nominal and real return triangle for German house prices from 1970 to 2022. The market offered an inflation hedge in the past. This is in particular true for periods of high inflation as in these periods house prices even exceeded inflation. The huge supply shortage and rising rents are further arguments for a bottoming out of house prices in 2023. [more]
December 20, 2022
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6
For more than a decade, European banks have sought to catch up and narrow the gap to their US peers. For many years, they were not particularly successful, due to a number of reasons: economic growth in the US outpaced that in Europe, interest rates were consistently higher (and never negative) on the other side of the Atlantic, and restructuring and capital raising needs were greater in Europe which constrained the banks’ ability to expand their business. In the past few years, however, European banks’ performance has indeed improved and they have not just made substantial progress, but also seem well positioned to finally reduce the distance to their US competitors. [more]
September 14, 2022
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Analyst:
8
On July 21, the ECB announced that it would raise the interest rate on the deposit facility from -0.5% to 0%, effective July 27. By the end of that very month, banks in Germany had reduced their stock of banknotes and coins by a record EUR 11 billion. There is much to suggest that they will continue to reduce their non-interest-bearing cash holdings, as the ECB interest rate will rise further to 0.75% in mid-September. [more]
August 19, 2021
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11
For the German federal elections in September, about 60m voters are called to cast their ballot. Despite more than half of voters being 50 years and above, it would still be too far-fetched to say that Germany has become a so-called gerontocracy, where the interests of the older dominate the political process. Moreover, the pandemic could curb participation among all age groups. [more]
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