Germany’s current account non-seasonally adjusted rose to €20 billion in February from the previous €11.8 billion. This marks a substantial increase in the country’s current account surplus.
Germany’s current account balance jumped in February, registering €20 billion in surplus, up from €11.8 billion the previous month. A current account tracks a country’s trade in goods and services, along with income from investments and financial transfers. When the surplus widens like this, it usually points to exports outpacing imports more than before, or a rise in income from foreign assets.
Trade And Domestic Demand
What we’re seeing here might not just be about trade. German exporters may be benefiting from weakening domestic demand, especially if households and firms are cutting back on imports. There might also be some base effects at play—January’s number was already relatively low. The difference in just one month suggests either a sharp improvement in export activity, a drop in energy imports, or potentially both. A milder winter and falling energy prices could have played a role, easing the external payments load.
For those positioned in rate-sensitive instruments, we’re paying close attention to how the trade side feeds into broader monetary policy expectations. A stronger external balance, in isolation, doesn’t alter inflation readings. But when coupled with declining import prices, especially from energy, this can weigh on headline inflation.
Surplus And Monetary Policy
That said, the surplus itself may not be enough to shift policy by any major central bank, though it does create a bit more room for fiscal breathing domestically. Berlin might be under less pressure to stimulate demand if the external sector is pulling its weight. Investors and traders focusing on interest rate spreads might want to track whether this current account trend sustains into Q2.
In the euro area context, this data speaks to relative strength. If Germany continues seeing stronger balances against European peers, we might expect divergence expectations to rise—again, not on rates today, but on future spreads and macro path assumptions. Though it’s a big number, the real test will be if this becomes a pattern or if it’s just seasonal noise. For now, it places some weight behind the euro in the near term, but not enough to build a long view off yet.
