World Power Shift: Germany Assumes Role of Leading Global Creditor, Displacing Japan from Position
In a significant shift in global financial dynamics, as of the close of 2024, Germany has edged past Japan to claim the title of the world's largest creditor nation. The Japanese Finance Ministry confirmed this change in the ranking, marking the end of Japan's 34 years as the world's leading creditor.
Despite a 13% year-on-year increase in Japan's net overseas assets to 533.05 trillion yen (approximately 3.27 trillion euros), Germany's net external assets of 569.65 trillion yen (3.49 trillion euros) surpassed Japan's.
While the Japanese government downplayed the implications of this development, asserting that the shift in ranking does not suggest a significant change in Japan's standing, the consistent rise in Japan's net overseas assets has resulted from a weaker yen and overseas investments by Japanese companies.
In contrast, Germany's creditor position is underpinned by a substantial current account surplus of €248.7 billion in 2024, driven by a robust trade-driven surplus and strong export performance. This momentum, coupled with favorable currency dynamics, has amplified the value of Germany’s assets, making its creditor position appear stronger in yen terms.
As the world's largest creditor, Germany's position reflects its robust trade surplus, strong export performance, and favorable currency dynamics in 2024, highlighting shifting global economic trends towards Europe and strengthening Germany’s international investment position.
Sources: ntv.de, AFP
- The Commission, in the preparation of the report, has noted Germany's strengthening position in global finance, as it has surpassed Japan to become the world's largest creditor nation.
- Businesses, especially German exporters, have played a significant role in bolstering Germany's creditor position, contributing to a robust trade surplus and strong export performance in 2024.
