KfW Credit Market Outlook August 2025

According to estimates by KfW Research, new lending to businesses grew by 2.9% on the previous year in the first quarter. Despite the positive economic environment driven by pull-forward effects and favourable loan interest rates, new lending developed only at a modest rate.

The uncertain economic outlook as a result of the US tariff policies is dampening lending by banks as businesses are more reluctant to invest and banks adopt more restrictive practices. Nonetheless, there are signs that businesses’ financing requirements are increasing. The expected impetus from the fiscal package and the ‘Made for Germany’ investment initiative of businesses can give new lending a bit of a boost in the near and medium term. KfW Research therefore expects new lending to grow moderately again after a setback in the second quarter.

KfW Credit Market Outlook August 2025(PDF, 161 KB, accessible)