ifo Institute: Germany’s Surplus Increased Again

It’s likely that a key factor here is the recession in German industry, which has slowed growth in the import of goods,” Grimme says. Another is continued growth in primary income in 2019, supported in particular by earnings from foreign assets. Surpluses resulting from primary income now account for 37 percent of the current account surplus. This indicates a high level of net income from foreign direct investment and securities investment. However, economists are not yet in agreement as to the profitability of Germany’s foreign investments.

All this means that in 2019, as in the previous three years, Germany will once again have had the largest current account surplus. Germany’s total far exceeds that of Japan, which is expected to record a surplus of USD 194 billion (3.8 percent of its annual economic output). In third place is China, with approximately USD 183 billion (1.3 percent). In contrast, the US will once again have had the world’s largest current account deficit, some USD 490 billion; however, this represents just 2.3 percent of its annual economic output. The US is followed by the UK, with a deficit of USD 117 billion (4.2 percent), and Brazil, with USD 51 billion (2.9 percent).