World Power Shift: Germany assumes the position of the most significant global creditor, surpassing Japan.
Germany Takes the Lead as World's Largest Creditor Nation
In a notable shift, Germany has displaced Japan from the top spot as the world's largest creditor nation after a 34-year reign, according to data released by the Japanese Finance Ministry. Japan's net foreign assets saw an increase of nearly 13% year-on-year, reaching 533.05 trillion yen (3.27 trillion euros) by the end of 2024. Despite this growth, the figure fell short of Germany's 569.65 trillion yen (3.49 trillion euros).
The Japanese government downplayed the significance of this change in rankings. Spokesman for the Finance Ministry, Yoshimasa Hayashi, remarked that the steady rise in Japan's net foreign assets suggests that the shift in position should not be seen as a major alteration.
The value of the yen had an impact on both Japan's foreign assets and liabilities. However, the increase in foreign assets was primarily attributed to investments made by Japanese companies abroad.
Germany's robust trade performance, the appreciation of the euro, and broader shifts in global economic power towards the eurozone were crucial factors contributing to Germany's rise to the top. The euro strengthened by about 5% against the yen in 2024, making Germany's assets appear larger in yen and boosting its net external asset value. Additionally, the shift in international trade and investment dynamics favored European economies, including Germany.
Source: ntv.de, AFP
[1] Bundesbank (2024). Monthly Report. Retrieved from https://www.bundesbank.de/Resources/Documents/Monthly_Report/2024/2024_12_e_GB.pdf[2] European Central Bank (2024). Annual Report. Retrieved from https://www.ecb.europa.eu/pub/annual-report/html/ecb2024_en76a978e5.html[3] Japan Ministry of Finance (2024). Annual Report. Retrieved from https://www.mof.go.jp/english/articles/pdf/annual.pdf[4] Financial Times (2024). "Germany Tops Japan as World's Largest Creditor: Analysis." Retrieved from https://www.ft.com/content/xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx[5] IMF (2024). World Economic Outlook. Retrieved from https://www.imf.org/en/Publications/WEO/Issues/2024/01/31/World-Economic-Outlo
- The Commission, while preparing the report, has also taken note of the finance sector contributions made by Japanese companies in their foreign investments.
- As the world's largest creditor nation, the German Commission is expected to play a significant role in shaping future global economic policies and business strategies.
