MBA Germany

German Economy


 

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Germany had a prosperous economy, which however, was forced onto a decline curve after the unification of East and West Germany in 1990. It was the differences between the economic systems of the two portions that caused the economy of East Germany to deteriorate. Even today, improving the East Germany's economy amounts to be a costly affair, with annual transfers from west to east working out to roughly $70 billion. This accompanied with the country's ageing population and high rate of unemployment has pushed social security outlays to a level exceeding contributions from workers. In recent years business and political leaders have become increasingly concerned about Germany's decline in attractiveness as an investment target. In the years 2002 and 2003, the economic growth fell short of 1%. However, corporate restructuring and growing capital markets are laying the foundations to allow Germany to meet the long-term challenges of European economic integration and globalization.

The important thing is that Germany economy is a predominant force in world markets because of the strong export orientation that has been part of the German tradition for centuries. Although the burdens of unification have cut into West Germany's traditional export surplus, German industry continues to produce some of the best machine tools, automobiles, trucks, chemicals, and engineering products in the world. Its management culture, which mingles competition and cooperation, stresses quality and durability above all other virtues. Because many German companies are small or medium-sized, they are able to concentrate on a few production lines that compete effectively even if they are expensive.

Economy Statistics

These are some of the most important statistics of Germany's economy :

Economy of Germany
Currency 1 Euro = 100 eurocent
Fiscal year Calendar year
Trade organisations EU, WTO (via EU membership) and OECD
Economy Statistics
GDP (PPP) $2.446bn (2005)
GDP growth 0.9% (2005)
GDP per capita $ 29,700 (2005)
GDP by sector agriculture (1.1%), industry (28.6%), services (70.3%) (2005)
Inflation (CPI) 2% (2005)
Pop below poverty line 13.7% (2005)
Labour force 43.32 million (2005)
Labour force by occupation services (71.9%), industry (25.9%), agriculture (2.2%) (2005)
Unemployment 9.6% (Nov 2006)
Main industries iron, steel, coal, cement, chemicals, machinery, vehicles, machine tools, electronics, food and beverages, shipbuilding, textiles
Trading Partners
Exports $1.016 trillion (2005)
Export goods machinery, vehicles, chemicals, metals and manufactures, foodstuffs, textiles
Main partners France 10.6%, U.S. 9.3%, UK 8.4%, Italy 7.4%, Netherlands 6.2%, Austria 5.3%, Belgium 5.1%, Spain 4.9%, Switzerland 4% (2003)
Imports $801bn (2005)
Imports goods machinery, vehicles, chemicals, foodstuffs, textiles, metals
Main Partners France 9.2%, Netherlands 8.4%, United States 7.3%, Italy 6.3%, UK 6%, Belgium 4.9%, the People's Republic of China 4.7%, Austria 4% (2003)
Public finances
Public debt $1,417bn (62.4% of GDP)
Revenues $1,079bn (2004)
Expenses $1,173bn (2004)
Economic aid donor: $5.6bn (1998)

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