Germany‘s export surpluses – Asset accumulation for the future? Bertelsmann Stiftung GED Focus Paper 2018 February

For decades, Germany has been generating large export surpluses. The associated accumulation of assets vis-à-vis other countries provides one possibility of enabling a high standard of living for the ageing German population in the future. However, there is no guarantee that these asset investments will maintain their value over the long term. If Germany‘s cumulative current account surpluses between 2000 and 2017 are compared with the change in its net foreign assets in the same period, the result is a book loss in the hundreds of billions of euros. Even if many of these price and exchange rate-related losses in asset value could be compensated for, there is no guarantee that all losses can actually be offset in the long term. Given these uncertainties and the fact that Germany shows a considerable weakness in overall economic investment, it is quite conceivable that higher domestic investment could constitute a better macroeconomic provision to deal with the ageing of the population