FRANKFURT, Sept. 17 (Xinhua) -- Investment activity among German companies remained subdued in the first half of the year, the German Association of Credit Banks (BFACH) said on Wednesday.
According to BFACH, German credit banks financed capital goods and specialized equipment worth 5.2 billion euros (6.136 billion U.S. dollars) for domestic companies in H1 2025, which represents a decline of 6.6 percent compared to the same period in 2024.
"Credit banks are a seismograph for the economic situation," said Jens Loa, managing director of BFACH. "Companies are holding back on investments, which sends another warning signal for the German economy."
"If companies scale back their investments and consumer sentiment remains weak, this will further slow down Germany's economic development," he added.
Credit risks are increasingly materializing, particularly in the corporate sector, the German central bank Bundesbank noted on Tuesday in a report on the earnings performance of German credit institutions in 2024.
According to the Bundesbank, citing data from the German Federal Statistical Office (Destatis), corporate insolvencies have risen significantly since 2022, albeit from a relatively low baseline.
The Bundesbank warned that a further rise in insolvency rates cannot be ruled out if economic conditions remain weak. (1 euro = 1.18 U.S. dollar) ■