KfW Credit Market Outlook March 2021

Towards the end of the year, new lending by German banks to enterprises and self-employed persons fell behind the previous year’s level by a noticeable -4.3%. Thus, unlike in the spring of 2020, the second coronavirus wave failed to trigger a significant increase in credit demand.

The restrictions imposed in autumn put renewed pressure on many businesses, but the second wave of infections has had a less severe macroeconomic impact. Government financial support combined with businesses’ adaptation measures further stabilised the liquidity position in the fourth quarter. Given the enormous uncertainty, investment financing continues to be in low demand.

We also expect a significant year-on-year decline in lending in the first half of the year. This is partly the result of a pronounced base effect created by the pandemic-driven strong lending activity in spring and summer 2020.

KfW Credit Market Outlook March 2021(PDF, 136 KB, non-accessible)

Press release