New lending to businesses continues to recover from its low in autumn of 2023. For the first time in two years, the new business of banks with companies is growing again. KfW Research has calculated that new lending activity grew by 1.6% in the third quarter of 2024 compared to the previous year. Falling interest rates and a base effect created by the low lending volume in the same quarter of the previous year drove this development. The subdued economic environment, trade policy uncertainty and businesses’ reluctance to invest slowed the recovery in lending activity in the third quarter.

These impediments will remain for the foreseeable future, while falling interest rates will stabilise credit growth. Credit growth likely stood at around 2.6% in the fourth quarter of 2024 and will hover around 2% in the first quarter of 2025. The uncertainty around the direction of US trade policy and associated countermeasures presents a downside risk for this forecast.

KfW Credit Market Outlook Q4 2024(PDF, 260 KB, accessible)

Press release