Germany overtakes Japan: largest creditor state in the world!

Germany overtakes Japan: largest creditor state in the world!

Germany recently replaced Japan as the world's largest creditor state. This is the first time in 34 years that Japan has lost this competitive position. Loud it-boltwise.de Germany's net foreign assets are around 3.51 trillion euros, while Japan follows with around 3.3 trillion euros. This net foreign assets results from the difference between the assets held abroad and those owned by foreigners in Germany. A high value indicates that a country holds more assets abroad, making it a creditor state.

Germany has recently benefited from a current account surplus of 248.7 billion euros in 2024, achieved primarily through strong export performance. In contrast, Japan had a current account surplus of just 29.4 trillion yen, about 180 billion euros. Despite a slight weakness in industry and job cuts at home, Germany continued to export more goods than it imported. This reinforces the assessment that the export sector remains a key driver of the German economy.

International context and geopolitical risks

Overtaking Japan also has geopolitical implications. Geopolitical tensions, particularly regarding China, could pose risks to German assets. Commerzbank's Jörg Krämer points out that Germany's assets in China could be at risk in a conflict over Taiwan. Financial expert Clemens Fuest from the Ifo Institute also emphasizes that Germany urgently needs more domestic investment in order to secure jobs and increase tax revenue.

However, the change in the rankings has no direct impact on consumers or companies. Nevertheless, changes in the global economic situation could have long-term effects on trade relations and economic imbalances. US President Donald Trump had already identified previous current account surpluses of other countries as a threat to the US economy and criticized Germany for its export surplus.

Increase in assets in Japan

Although Japan has lost its position as the largest creditor state, Finance Minister Katsunobu Kato is unimpressed and emphasizes the continuous increase in net foreign assets, which amounted to about 533.05 trillion yen (3.28 trillion euros) at the end of 2024. This figure represents an increase of about 13% compared to last year. However, a weaker yen has contributed to the increase in both foreign assets and liabilities in Japan.

Overall, China remains in third place in the world with a net worth of 3.18 trillion euros. The euro-yen exchange rate has risen by around 5% over the past year, reinforcing the rise of German yen-denominated assets and further underlining the importance of trade ties. Despite the challenges in international markets, the German financial sector remains in a strong position, while Japan hopes for a return to its former strength.

The current situation illustrates how closely a country's net foreign assets are linked to its trade balance and suggests the complexity of global economic relationships.