Overview

• The Bundesbank recorded a €19.2 billion loss for 2024, its largest ever and the first deficit since 1979.
• The loss was primarily caused by the European Central Bank's (ECB) sharp interest rate increases starting in 2022, which raised borrowing costs while reducing returns on long-term assets.
• The Bundesbank's reserves have been significantly depleted, leaving only €0.7 billion to absorb future losses, though its gold reserves have increased in value to €267 billion.
• No profits have been transferred to the German federal budget for five consecutive years, impacting government finances that traditionally relied on these funds.
• Bundesbank President Joachim Nagel stated that annual losses are expected to decline moving forward, with inflation in Germany projected to stabilize at 2% by 2026.