Germany: Economy#
The German economy - the fifth largest economy in the world in PPP terms and Europe's largest - is a leading exporter of machinery, vehicles, chemicals, and household equipment and benefits from a highly skilled labor force. Like its Western European neighbors, Germany faces significant demographic challenges to sustained long-term growth. Low fertility rates and a large increase in net immigration are increasing pressure on the country's social welfare system and necessitate structural reforms.Reforms launched by the government of Chancellor Gerhard SCHROEDER (1998-2005), deemed necessary to address chronically high unemployment and low average growth, contributed to strong growth and falling unemployment. These advances, as well as a government subsidized, reduced working hour scheme, help explain the relatively modest increase in unemployment during the 2008-09 recession - the deepest since World War II. The new German Government introduced a minimum wage of about $11.60 (8.50 euros) per hour that took effect in 2015.
Stimulus and stabilization efforts initiated in 2008 and 2009 and tax cuts introduced in Chancellor Angela MERKEL's second term increased Germany's total budget deficit - including federal, state, and municipal - to 4.1% in 2010, but slower spending and higher tax revenues reduced the deficit to 0.8% in 2011 and in 2015 Germany reached a budget surplus of 0.9%. A constitutional amendment approved in 2009 limits the federal government to structural deficits of no more than 0.35% of GDP per annum as of 2016, though the target was already reached in 2012.
The German economy suffers from low levels of investment, and a government plan to invest 15 billion euros during 2016-18, largely in infrastructure, is intended to spur needed private investment. Following the March 2011 Fukushima nuclear disaster, Chancellor Angela MERKEL announced in May 2011 that eight of the country's 17 nuclear reactors would be shut down immediately and the remaining plants would close by 2022. Germany plans to replace nuclear power largely with renewable energy, which accounted for 27.8% of gross electricity consumption in 2014, up from 9% in 2000. Before the shutdown of the eight reactors, Germany relied on nuclear power for 23% of its electricity generating capacity and 46% of its base-load electricity production. Domestic consumption, bolstered by low energy prices and a weak euro, are likely to drive German GDP growth again in 2016.
Economic Facts#
| GDP (purchasing power parity) | $3.979 trillion (2016 est.) $3.911 trillion (2015 est.) $3.854 trillion (2014 est.) note: data are in 2016 dollars |
|---|---|
| GDP (official exchange rate) | $3.495 trillion (2015 est.) |
| GDP - real growth rate | 1.7% (2016 est.) 1.5% (2015 est.) 1.6% (2014 est.) |
| GDP - per capita (PPP) | $48,200 (2016 est.) $47,600 (2015 est.) $47,500 (2014 est.) note: data are in 2016 dollars |
| Gross national saving | 27.9% of GDP (2016 est.) 27.7% of GDP (2015 est.) 27% of GDP (2014 est.) |
| GDP - composition, by end use | household consumption: 53.7% government consumption: 19.5% investment in fixed capital: 20.1% investment in inventories: -1% exports of goods and services: 45.7% imports of goods and services: -38% (2016 est.) |
| GDP - composition, by sector of origin | agriculture: 0.6% industry: 30.3% services: 69.1% ++ (2016 est.) |
| Agriculture - products | potatoes, wheat, barley, sugar beets, fruit, cabbages; milk products; cattle, pigs, poultry |
| Industries | among the world's largest and most technologically advanced producers of iron, steel, coal, cement, chemicals, machinery, vehicles, machine tools, electronics, automobiles, food and beverages, shipbuilding, textiles |
| Industrial production growth rate | 1.5% (2016 est.) |
| Labor force | 45.3 million (2016 est.) |
| Labor force - by occupation | agriculture: 1.6% industry: 24.6% services: 73.8% ++ (2011) |
| Unemployment rate | 4.3% (2016 est.) 4.6% (2015 est.) |
| Population below poverty line | 15.5% (2010 est.) |
| Household income or consumption by percentage share | lowest 10%: 3.6% highest 10%: 24% (2000) |
| Distribution of family income - Gini index | 27 (2006) 30 (1994) |
| Budget | revenues: $1.507 trillion expenditures: $1.484 trillion (2016 est.) |
| Taxes and other revenues | 43.1% of GDP (2016 est.) |
| Budget surplus (+) or deficit (-) | 0.6% of GDP (2016 est.) |
| Public debt | 69% of GDP (2016 est.) 71.2% of GDP (2015 est.) note: general government gross debt is defined in the Maastricht Treaty as consolidated general government gross debt at nominal value, outstanding at the end of the year in the following categories of government liabilities (as defined in ESA95): currency and |
| Fiscal year | calendar year |
| Inflation rate (consumer prices) | 0.4% (2016 est.) 0.1% (2015 est.) |
| Central bank discount rate | 0.05% (31 December 2013) 0.3% (31 December 2010) note: this is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks in the euro area |
| Commercial bank prime lending rate | 1.7% (31 December 2016 est.) 1.84% (31 December 2015 est.) |
| Stock of narrow money | $2.049 trillion (31 December 2016 est.) $1.923 trillion (31 December 2015 est.) note: see entry for the European Union for money supply for the entire euro area; the European Central Bank (ECB) controls monetary policy for the 18 members of the Economic and Monetary Union (EMU); individual members of the EMU do not control the quantity of |
| Stock of broad money | $4.347 trillion (31 December 2014 est.) $4.451 trillion (31 December 2013 est.) |
| Stock of domestic credit | $4.327 trillion (31 December 2016 est.) $4.452 trillion (31 December 2015 est.) |
| Market value of publicly traded shares | $1.716 trillion (31 December 2015 est.) $1.739 trillion (31 December 2014 est.) $1.936 trillion (31 December 2013 est.) |
| Current account balance | $301.4 billion (2016 est.) $284.2 billion (2015 est.) |
| Exports | $1.283 trillion (2016 est.) $1.309 trillion (2015 est.) |
| Exports - commodities | motor vehicles, machinery, chemicals, computer and electronic products, electrical equipment, pharmaceuticals, metals, transport equipment, foodstuffs, textiles, rubber and plastic products |
| Exports - partners | US 9.6%, France 8.6%, UK 7.5%, Netherlands 6.6%, China 6%, Italy 4.9%, Austria 4.8%, Poland 4.4%, Switzerland 4.2% (2015) |
| Imports | $987.6 billion (2016 est.) $1.017 trillion (2015 est.) |
| Imports - commodities | machinery, data processing equipment, vehicles, chemicals, oil and gas, metals, electric equipment, pharmaceuticals, foodstuffs, agricultural products |
| Imports - partners | Netherlands 13.7%, France 7.6%, China 7.3%, Belgium 6%, Italy 5.2%, Poland 5%, US 4.7%, Czech Republic 4.5%, UK 4.2%, Austria 4.2%, Switzerland 4.2% (2015) |
| Reserves of foreign exchange and gold | $173.7 billion (31 December 2015 est.) $173.7 billion (31 December 2015 est.) |
| Debt - external | $5.326 trillion (31 March 2016 est.) $5.21 trillion (31 March 2015 est.) |
| Stock of direct foreign investment - at home | $1.416 trillion (31 December 2016 est.) $1.36 trillion (31 December 2015 est.) |
| Stock of direct foreign investment - abroad | $2.08 trillion (31 December 2016 est.) $1.972 trillion (31 December 2015 est.) |
| Exchange rates | euros (EUR) per US dollar - 0.9214 (2016 est.) 0.885 (2015 est.) 0.885 (2014 est.) 0.7634 (2013 est.) 0.7752 (2012 est.) |