Germany Economy Profile 2008

Economy - overview

Germany's affluent and technologically powerful economy - the fifth largest in the world in PPP terms - showed considerable improvement in 2007 with 2.6% growth. After a long period of stagnation with an average growth rate of 0.7% between 2001-05 and chronically high unemployment, stronger growth led to a considerable fall in unemployment to about 8% near the end of 2007. Among the most important reasons for Germany's 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 $80 billion. 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. Germany's 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 2006-07 and a 3% rise in the value-added tax pushed Germany's budget deficit well below the EU's 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, although some economists continue to argue the need for change in inflexible labor and services markets. Growth may fall below 2% in 2008 as the strong euro, high oil prices, tighter credit markets, and slowing growth abroad take their toll.

GDP (purchasing power parity)

$2.833 trillion (2007 est.)

GDP (official exchange rate)

$3.259 trillion (2007 est.)

GDP - real growth rate

2.6% (2007 est.)

GDP - per capita (PPP)

$34,400 (2007 est.)

GDP - composition by sector

agriculture: 0.9%
industry: 29.6%
services: 69.5% (2007 est.)

Population below poverty line

11% (2001 est.)

Household income or consumption by percentage share

lowest 10%: 3.2%
highest 10%: 22.1% (2000)

Inflation rate (consumer prices)

2% (2007 est.)

Investment (gross fixed)

18.4% of GDP (2007 est.)

Labor force

43.63 million (2007 est.)

Labor force - by occupation

agriculture: 2.8%
industry: 33.4%
services: 63.8% (1999)

Unemployment rate

9.1%
note: this is the International Labor Organization's estimated rate for international comparisons; Germany's Federal Employment Office estimated a seasonally adjusted rate of 10.8% (2007 est.)

Distribution of family income - Gini index

28 (2005)

Budget

revenues: $1.465 trillion
expenditures: $1.477 trillion (2007 est.)

Public debt

65.3% of GDP (2007 est.)

Industries

among the world's largest and most technologically advanced producers of iron, steel, coal, cement, chemicals, machinery, vehicles, machine tools, electronics, food and beverages, shipbuilding, textiles

Industrial production growth rate

2.1% (2007 est.)

Electricity - production

579.4 billion kWh (2005)

Electricity - consumption

545.5 billion kWh (2005)

Electricity - exports

61.43 billion kWh (2005)

Electricity - imports

56.86 billion kWh (2005)

Oil - production

141,700 bbl/day (2005 est.)

Oil - consumption

2.618 million bbl/day (2005)

Oil - imports

2.953 million bbl/day (2004)

Oil - exports

518,700 bbl/day (2004)

Oil - proved reserves

367.2 million bbl (1 January 2006 est.)

Natural gas - production

19.9 billion cu m (2005 est.)

Natural gas - consumption

96.84 billion cu m (2005 est.)

Natural gas - exports

9.42 billion cu m (2005 est.)

Natural gas - imports

86.99 billion cu m (2005)

Natural gas - proved reserves

246.5 billion cu m (1 January 2006 est.)

Current Account Balance

$185.1 billion (2007 est.)

Agriculture - products

potatoes, wheat, barley, sugar beets, fruit, cabbages; cattle, pigs, poultry

Exports

$1.361 trillion f.o.b. (2007 est.)

Exports - commodities

machinery, vehicles, chemicals, metals and manufactures, foodstuffs, textiles

Exports - partners

France 9.5%, US 8.7%, UK 7.3%, Italy 6.7%, Netherlands 6.3%, Austria 5.6%, Belgium 5.2%, Spain 4.7% (2006)

Imports

$1.121 trillion f.o.b. (2007 est.)

Imports - commodities

machinery, vehicles, chemicals, foodstuffs, textiles, metals

Imports - partners

Netherlands 11.8%, France 8.5%, Belgium 7.2%, China 5.9%, UK 5.7%, Italy 5.6%, US 5.3%, Austria 4.3% (2006)

Reserves of foreign exchange and gold

$111.6 billion (2006 est.)

Debt - external

$4.489 trillion (30 June 2007)

Stock of direct foreign investment - at home

$763.9 billion (2006 est.)

Stock of direct foreign investment - abroad

$941.4 billion (2006 est.)

Market value of publicly traded shares

$1.221 trillion (2005)

Economic aid - donor

ODA, $10.44 billion (2006)

Currency (code)

euro (EUR)

Exchange rates

euros per US dollar - 0.7345 (2007), 0.7964 (2006), 0.8041 (2005), 0.8054 (2004), 0.886 (2003)

Fiscal year

calendar year