Guntram Wolff, (2018), “Germany’s current account surplus and corporate investment”, Bruegel, 9 May
Germany’s current account surplus is unusually, and persistently, large. It was above €250 billion euros in 2017, the third consecutive year with a current account surplus above 7.8% of GDP (IMF 2017). To put this into context, of the 193 countries listed in the IMF’s World Economic Outlook between 1999 and 2017 (totalling some 3,570 available observations of current accounts), there were only 238 episodes of three consecutive surpluses of more than 7.8% of GDP. Among those 238, the vast majority were countries that are either raw material and/or oil producers, with only a handful of countries other than raw material producers.
National accounting allows the current account to be broken down into the difference between the saving and the investment of all domestic sectors of the economy (i.e. the net lending of all domestic sectors). Table 1 breaks down the increase in Germany’s net lending from 1999 to 2016. It increased by more than 9 percentage points of GDP, with by far the largest contribution coming from the non-financial corporate sector, followed by government, and only then by households. Meanwhile, the financial sector itself has turned to a slight borrowing position.