Economy - overviewThe 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 declining 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 in 2006 and 2007 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 - and its decrease to 6.5% in 2012. GDP contracted 5.1% in 2009 but grew by 3.7% in 2010, and 3.0% in 2011, before dipping to 0.9% in 2012 - a reflection of the worsening euro-zone financial crisis and the financial burden it places on Germany as well as falling demand for German exports. Stimulus and stabilization efforts initiated in 2008 and 2009 and tax cuts introduced in Chancellor Angela MERKEL's second term increased Germany's budget deficit to 3.3% in 2010, but slower spending and higher tax revenues reduced the deficit to 1.7% in 2011, and the government estimates it had a balanced budget in 2012. 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. 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 hopes to replace nuclear power with renewable energy. 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. GDP (purchasing power parity)$3.194 trillion (2012 est.) GDP (official exchange rate)$3.367 trillion (2012 est.) GDP - real growth rate0.9% (2012 est.) GDP - per capita (PPP)$39,100 (2012 est.) GDP - composition by sectoragriculture: 0.8% Population below poverty line15.5% (2010 est.) Labor force44.01 million (2012 est.) Labor force - by occupationagriculture: 1.6% Unemployment rate6.5% (2012 est.) Unemployment, youth ages 15-24total: 11% Household income or consumption by percentage sharelowest 10%: 3.6% Distribution of family income - Gini index27 (2006) Investment (gross fixed)17.8% of GDP (2012 est.) Budgetrevenues: $1.511 trillion Taxes and other revenues44.9% of GDP (2012 est.) Budget surplus (+) or deficit (-)0% of GDP (2012 est.) Public debt80.5% of GDP (2012 est.) Inflation rate (consumer prices)2.2% (2012 est.) Central bank discount rate1.5% (31 December 2012) Commercial bank prime lending rate3.1% (31 December 2012 est.) Stock of money$NA Stock of narrow money$1.853 trillion (31 December 2012 est.) Stock of broad money$4.281 trillion (31 December 2012 est.) Stock of quasi money$NA Stock of domestic credit$4.253 trillion (31 December 2012 est.) Market value of publicly traded shares$1.184 trillion (31 December 2011) Agriculture - productspotatoes, wheat, barley, sugar beets, fruit, cabbages; cattle, pigs, poultry Industriesamong 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 rate8% (2011 est.) Current Account Balance$208.1 billion (2012 est.) Exports$1.492 trillion (2012 est.) Exports - commoditiesmotor vehicles, machinery, chemicals, computer and electronic products, electrical equipment, pharmaceuticals, metals, transport equipment, foodstuffs, textiles, rubber and plastic products Imports$1.276 trillion (2012 est.) Imports - commoditiesmachinery, data processing equipment, vehicles, chemicals, oil and gas, metals, electric equipment, pharmaceuticals, foodstuffs, agricultural products Reserves of foreign exchange and gold$238.9 billion (31 December 2011 est.) Debt - external$5.624 trillion (30 June 2011) Stock of direct foreign investment - at home$932.8 billion (31 December 2012 est.) Stock of direct foreign investment - abroad$1.464 trillion (31 December 2012 est.) Exchange rateseuros (EUR) per US dollar - Fiscal yearcalendar year |
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Source: CIA World Factbook | |