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Financial assets of German households: More diversified than their reputation

October 19, 2018
Region:
German households hold a higher share of their savings in bank deposits than their French or British peers. But their portfolios are more diversified than perception suggests if all low-risk/low-return investments are taken into account. They invest meaningfully in stock markets, both directly and indirectly. The recent upward trend though may be driven by the low interest rate environment. In Q2, household lending in Germany continued to grow dynamically at 3.8% yoy, driven solely by mortgage loans. However, mortgage growth has not increased much recently despite the benign economic situation and booming real estate markets. Consumer loans declined for the first time in five years. Meanwhile, deposits saw exceptionally large inflows, with maturities shortening further. [more]

More documents about "Germany"

237 (13-24)
August 23, 2019
Region:
13
What should an honest and law-abiding German citizen think when their finance minister, a high-ranking representative of the state, is investigating whether he can protect them from the actions of another state body, the central bank? This is exactly what the Bavarian Prime Minister Söder is calling for: a ban on negative interest on bank deposits (up to a certain level), whose chances of realisation are now being examined by the Federal Ministry of Finance. [more]
August 19, 2019
Region:
14
We see Germany in a technical recession, as we expect another ¼% GDP drop in Q3. Our forecast for 2019 is now 0.3%. Given no indication for a rebound we lowered our 2020 forecast to 0.7%. We acknowledge these revisions do not properly account for the recent accumulation of risks. Given the increasingly fragile state of the global economy, the realization of one or more risks could easily push the economy into a completely different scenario, where growth revisions of a few tenths of a percentage point will not be sufficient. (Also in this issue: German automotive industry, chemical industry, house prices, corporate lending, the view from Berlin, digital politics.) [more]
July 8, 2019
Region:
15
In case of a snap election in Germany, a CDU/CSU-Greens coalition could be an option. Given both camps' radically different political positions in many areas, such a coalition would require both to make significant compromises. A black-green government would need to direct its focus and its available financial resources to climate protection and the energy transition. Corporates and consumers would have to bear considerable costs. This also spells a dilemma for fiscal policy. A larger share of government spending would necessarily have to be allocated to providing subsidies and mitigating the social impact of a quicker energy transition. Citizens and corporates cannot hope for major tax relief. (Also included in this issue: German goods exports, German industry, labour market, automotive business cycle.) [more]
July 5, 2019
Region:
16
In Germany, a decline in the labour force is inevitable. This can be seen from the recently published official 14th population projection. In this projection, the Federal Statistical Office took into account the past years‘ massive immigration. The impact is impressive. In the next few years, the number of inhabitants will increase by about 1 million to approx. 84 million – a new record high. Under plausible assumptions regarding future immigration (i.e. in the volume close to the past 20-year average – 268.000 p.a.) this number will decrease only slightly in the next two decades. [more]
June 18, 2019
Region:
17
Mortgage loans in Germany have risen to EUR 1,240 bn in recent years (+29% since 2011) thanks to the strong economy and falling interest rates. To account for increased risks for the banks, supervisory authorities decided at the end of May to activate the countercyclical capital buffer for the first time. E.g., almost half of all new loans now have a rate fixation period of more than 10 years. Banks’ business with private households got off to a strong start in 2019. Net lending in the first quarter amounted to EUR 8.8 bn and deposits increased by EUR 21.8 bn, both record figures for the beginning of the year. Both mortgages and consumer loans grew strongly. [more]
June 6, 2019
Region:
18
Capacity utilisation in the German electricity sector has steadily declined over the last few years and amounted only to 34% in 2017. Much of this downtrend is due to the development of renewable energy generation. Average capacity utilisation is particularly low at wind and photovoltaic power plants, which are dependent on the weather. At the same time, these plants benefit from extremely low marginal costs and priority feed-in conditions. This enables them to (temporarily) squeeze out other electricity providers, whose average capacity utilisation has declined as a consequence. There is a political preference for natural gas to compensate for the consequences of the exit from nuclear and coal power generation during the coming years. Nevertheless, there are some risks for operators and investors. [more]
May 20, 2019
Region:
19
This edition of Focus Germany has quite a lot but rather short articles. We are taking stock of the German economy after Q1’s surprisingly strong growth. We expect the economy to flatline in Q2 and foresee an only subdued recovery in H2 given the recent flare-up of several geopolitical hotspots, rather than their hoped for de-escalation. We cross-check this analysis with deep dives into the auto and the mechanical engineering sector. We look at the impossible trinity of Germany’s fiscal policy (tax cuts, higher social expenditures and the black zero) and peek into the difficulties finance ministers are facing in the digital economy. We discuss to what extent the upcoming EP and Länder elections might spell more trouble for the Groko and introduce our new German financial conditions index. [more]
May 15, 2019
Region:
Analyst:
20
For both environmental and economic reasons, a carbon tax would be superior to the current patchwork of subsidies and regulatory law (standards, bans, caps, quotas etc.) which characterises climate policy. However, the tax has a key disadvantage: while it sets a price for carbon emissions, it does not set a cap. That is why emissions trading is even superior to a carbon tax. Despite the convincing advantages of market-based in-struments, a fundamental re-orientation of German and European climate policy unfortunately appears unlikely. Instead, existing instruments will probably be adapted again and again once their negative side effects become too obvious. This will make climate policy less efficient than it could be and more expensive than necessary. [more]
May 13, 2019
Region:
Analyst:
21
The German logistics sector has continued to increase its overall turnover, despite the industrial recession. Logistics, one of the biggest sectors in Germany, seems to have decoupled from the industry to some extent. This is quite unusual. However, revenue growth in the logistics sector is supported by several developments: the boom in construction, a larger number of smaller deliveries due to the uptrend in e-commerce, the growing importance of value-added services and price effects. Nevertheless, the industrial recession is likely to have an impact on the logistics sector in the first half of 2019. We expect nominal revenues in the sector to stag-nate or even decline during the first half of 2019. [more]
April 18, 2019
Region:
22
Not least because they fear that the trend towards electromobility may cause losses in value added and job cuts in Germany, policymakers are debating subsidies for national battery cell production. From a regulatory perspective, supporting local manufacturing would be dubious and comes with high economic risks. On princi-ple, German automakers ought to be better judges than policymakers, both with regard to the indispensability of battery cell manufacturing in Germany and its long-term profitability. The state is not needed, at least not as a source of subsidies. [more]
April 9, 2019
Region:
23
If you think of Germany in the night (and you are an economist) three questions will jolt you from your sleep. Will external demand recover? Will the auto industry overcome its WLTP-induced supply shock and (if you are a Keynesian economist) will the government launch a fiscal package? The answers, of course, are not independent of each other. (Included in this issue: German exports 2019, world trade, the automotive industry's performance, public finances and the view from Berlin) [more]
March 18, 2019
Region:
Analyst:
24
Although the negative effects from the WLTP roll-out are currently petering out in German auto statistics, the recent weakness of global demand argues against a swift recovery of auto production in Germany. In 2019, passenger car sales look set to shrink slightly or at best stagnate in some key markets (US, EMU, UK), whilst rising only moderately in others (China). A rebound is unlikely to materialise before H2 2019, when output is also expected to turn positive in year-over-year terms. Going by the production index, annualised automotive output in Germany ought to be more or less flat in 2019, in our view. [more]
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