KfW Credit Market Outlook October 2025

According to estimates by KfW Research, new lending to businesses in the second quarter grew by a mere 0.8% on the previous year. In real terms, new lending actually decreased. The weak economy and US tariffs dampened lending from German banks to businesses.

Is the moderate credit growth already over again? The significant drop in loan interest rates since the start of the year will likely raise demand for corporate finance slightly in spite of the weak performance of the economy. The strict lending standards being applied by banks, however, will continue to act as a dampener, so that only minor lending growth should be expected in the third quarter. New lending could grow more strongly, however, if the economy brightens with the fiscal package in the fourth quarter.

KfW Credit Market Outlook October 2025(PDF, 199 KB, accessible)