US Investments in Germany Plunge by 44% in 2025 Amid Overall Foreign Investment Surge

In 2025, foreign direct investments (FDI) in Germany surged by 50% to approximately €86 billion, marking a significant recovery following a nearly 32% drop in 2024. However, this positive trend masks a dramatic decline in US investment. According to analyses from the Institute of the German Economy (IW) based on Bundesbank data, American companies reduced their investments in Germany to just €11.8 billion — a steep decrease of almost 44% compared to 2024. This drop caused the US share of all foreign investment in Germany to fall sharply from over 36% to around 14%.

Contrasting the US decline, the United Kingdom emerged as the largest foreign investor, with investments soaring by approximately 284% to €26 billion, capturing nearly 31% of all foreign investment flows. European nations collectively remain dominant, contributing more than 80% of FDI in Germany when the UK is included. Other countries like China saw modest growth of about 51%, though their total contributions were minimal at around €199 million (0.2%). Investments from Chile and Saudi Arabia also rose notably by over 40%.

IW economist Samina Sultan highlighted the volatile nature of direct investment flows, which can fluctuate considerably year to year and are influenced by large transactions and subsequent data revisions. She noted the pronounced shift in the origin of capital entering Germany in 2025, reflecting changing global economic dynamics and investment strategies.

While the overall rebound in foreign investment underscores Germany’s enduring attractiveness as a destination, the sharp retreat of US investors signals a significant alteration in transatlantic economic engagement this year.