Economic Trends/Outlook in Germany

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Economic Overview

Germany is Europe's primary economy. Over the last few years, its performance has not been dynamic due to the country's vulnerability to outside shocks, domestic structural problems and the permanent difficulties of integrating the formerly communist eastern part. Strongly hit by the international financial crisis, Germany went into recession in 2009 and then recovered growth in 2010 (3.3%) under the combined effects of the stimulus plan and the resumption of international trade and investment. Some believe that the pre-crisis level of activity will be reached as soon as at the end of 2011.

Thanks to the good economic situation, the government’s priority is now to deal with the budget deficit, which soared during the crisis and to implement measures favoring investment and new technologies, in order to diversify the economy and no longer depend on exports.

Despite the gravity of the recession, Germany was able to contain its unemployment rates around 8%, thanks to the adopted measures. The integration of the former Eastern Germany, where the unemployment rate remains very high, nevertheless continues to pose problems.

Main Indicators 2009 2010 2011 2012 2013
GDP (billions USD) 3,338.68 3,315.64e 3,518.59e 3,599.98e 3,691.07e
GDP (Constant Prices, Annual % Change) -4.7 3.5e 2.5e 2.1e 1.9e
GDP per Capita (USD) 40,832 40,631e 43,205e 44,293e 45,504e
General Government Balance (in % of GDP) -1.0 -2.2e -2.1e -1.5e -1.0e
General Government Gross Debt (in % of GDP) 73.5 80.0e 80.1e 79.4e 77.9e
Inflation Rate (%) 0.2 1.2e 2.2e 1.5e 1.8e
Unemployment Rate (% of the Labor Force) 7.5 6.9e 6.6e 6.5e 6.3e
Current Account (billions USD) 160.63e 181.91e 189.45e 168.71e -
Current Account (in % of GDP) 4.8e 5.5e 5.6e 4.9e -

Source: IMF - World Economic Outlook Database

Note: (e) Estimated Data


Main Sectors of Industry

The German agricultural sector contributes about 1% of the GDP and employs about 2,5% of the active population. The sector has greatly benefitted from State subsidies. Main agricultural products are milk, pork and livestock farming, sugar beet and cereals. Consumers prefer organic agriculture. The country is going through a process of deindustrialization of the food sector. 

The contribution of the industrial sector to the GDP has dropped from 51% in 1970 to about 29% today. However, the German economy still has some specialized sectors such as mechanical engineering, electric and electronic equipment, automotive and chemical products. The automotive industry is one of the country's largest industrial sectors, and is the world's 3rd exporter of cars. Nevertheless, the crisis has affected German industry, especially the automotive sector as well as equipment, with a decrease in orders and the implementation of partial unemployment plans.

The tertiary sector contributes about 70% to the GDP. The German economic model relies mainly on a dense network of SMEs; there are more than 3 million of them employing 70% of the salaried workers.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 2.2 29.7 68.0
Value Added (in % of GDP) 0.8 26.5 72.7
Value Added (Annual % Change) 8.9 -14.9 -1.4

Source: World Bank - Last Available Data.

For more detailed background on Industries in Germany, click here.

Indicator of Economic Freedom

Mostly free
World Rank:
Regional Rank:

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation


Country Risk

See the Country Risk Analysis Provided By Ducroire.


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