The Economy of Germany

Key Indicators

  2006 2007 2008 2009 2010
GDP $3.33T $3.65T $3.34T $3.31T $3.36T
Unemployment Rate 8.37% 7.30% 7.49% 7.05% 7.15%
Population 82.18M 82.01M 81.77M 81.60M 81.44M

Featured Economic Indicators [ View all 1100 Economic Indicators ]

Gross Domestic Product (Percent change) Gross Domestic Product (U.S. dollars)
Per Capita Gross Domestic Product  (U.S. dollars) GDP (Purchasing Power Parity) (Current international dollar)
Investment (Percent of GDP) Gross national savings (Percent of GDP)
Inflation average consumer prices (Index) Inflation average consumer prices (Percent change)
Inflation (Index) Inflation (Percent change)
Unemployment rate (Percent of total labor force) Labor Force (Persons)
Population (Persons) Government revenue (National currency)
Government revenue (Percent of GDP) Government expenditure (Percent of GDP)
Government net lending/borrowing (Percent of GDP) Government structural balance (Percent of potential GDP)
Government primary net lending/borrowing (Percent of GDP) Government net debt (Percent of GDP)
Government gross debt (Percent of GDP) Current account balance (U.S. dollars)
Current account balance (Percent of GDP)  

Economic Overview of Germany

Germany Map
Germanys affluent and technologically powerful economy - the fifth largest in the world in PPP terms - showed considerable improvement in 2006 with 2.2% growth. After a long period of stagnation with an average growth rate of 0.7% between 2001-05 and chronically high unemployment, stronger growth has led to a considerable fall in unemployment to about 7% at the end of 2006. Among the most important reasons for Germanys high unemployment during the past decade were macroeconomic stagnation, the declining level of investment in plant and equipment, company restructuring, flat domestic consumption, structural rigidities in the labor market, lack of competition in the service sector, and high interest rates. The modernization and integration of the eastern German economy continues to be a costly long-term process, with annual transfers from west to east amounting to roughly $80000000000. The former government of Chancellor Gerhard SCHROEDER launched a comprehensive set of reforms of labor market and welfare-related institutions. The current government of Chancellor Angela MERKEL has initiated other reform measures, such as a gradual increase in the mandatory retirement age from 65 to 67 and measures to increase female participation in the labor market. Germanys aging population, combined with high chronic unemployment, has pushed social security outlays to a level exceeding contributions, but higher government revenues from the cyclical upturn in 2006 reduced Germanys budget deficit to within the EUs 3% debt limit. Corporate restructuring and growing capital markets are setting the foundations that could help Germany meet the long-term challenges of European economic integration and globalization.

Nation History

Germany Map
As Europes largest economy and second most populous nation, Germany is a key member of the continents economic, political, and defense organizations. European power struggles immersed Germany in two devastating World Wars in the first half of the 20th century and left the country occupied by the victorious Allied powers of the US, UK, France, and the Soviet Union in 1945. With the advent of the Cold War, two German states were formed in 1949: the western Federal Republic of Germany (FRG) and the eastern German Democratic Republic (GDR). The democratic FRG embedded itself in key Western economic and security organizations, the EC, which became the EU, and NATO, while the Communist GDR was on the front line of the Soviet-led Warsaw Pact. The decline of the USSR and the end of the Cold War allowed for German unification in 1990. Since then, Germany has expended considerable funds to bring Eastern productivity and wages up to Western standards. In January 1999, Germany and 10 other EU countries introduced a common European exchange currency, the euro.

Source(s): CIA World Factbook