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Germany vs. Denmark

Economy

GermanyDenmark
Economy - overview

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. Germany benefits from a highly skilled labor force, but, like its Western European neighbors, 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 economic 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 German Government introduced a minimum wage in 2015 that increased to $9.79 (8.84 euros) in January 2017.

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 2017 Germany reached a budget surplus of 0.7%. 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.

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 29.5% of gross electricity consumption in 2016, 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.

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. Domestic consumption, investment, and exports are likely to drive German GDP growth in 2018, and the country's budget and trade surpluses are likely to remain high.

This thoroughly modern market economy features advanced industry with world-leading firms in pharmaceuticals, maritime shipping, and renewable energy, and a high-tech agricultural sector. Danes enjoy a high standard of living, and the Danish economy is characterized by extensive government welfare measures and an equitable distribution of income. An aging population will be a long-term issue.

Denmark's small open economy is highly dependent on foreign trade, and the government strongly supports trade liberalization. Denmark is a net exporter of food, oil, and gas and enjoys a comfortable balance of payments surplus, but depends on imports of raw materials for the manufacturing sector.

Denmark is a member of the EU but not the eurozone. Despite previously meeting the criteria to join the European Economic and Monetary Union, Denmark has negotiated an opt-out with the EU and is not required to adopt the euro.

Denmark is experiencing a modest economic expansion. The economy grew by 2.0% in 2016 and 2.1% in 2017. The expansion is expected to decline slightly in 2018. Unemployment stood at 5.5% in 2017, based on the national labor survey. The labor market was tight in 2017, with corporations experiencing some difficulty finding appropriately-skilled workers to fill billets. The Danish Government offers extensive programs to train unemployed persons to work in sectors that need qualified workers.

Denmark maintained a healthy budget surplus for many years up to 2008, but the global financial crisis swung the budget balance into deficit. Since 2014 the balance has shifted between surplus and deficit. In 2017 there was a surplus of 1.0%. The government projects a lower deficit in 2018 and 2019 of 0.7%, and public debt (EMU debt) as a share of GDP is expected to decline to 35.6% in 2018 and 34.8% in 2019. The Danish Government plans to address increasing municipal, public housing and integration spending in 2018.

GDP (purchasing power parity)$4,482,448,000,000 (2019 est.)

$4,457,688,000,000 (2018 est.)

$4,401,873,000,000 (2017 est.)

note: data are in 2010 dollars
$336.335 billion (2019 est.)

$327.017 billion (2018 est.)

$320.053 billion (2017 est.)

note: data are in 2010 dollars
GDP - real growth rate0.59% (2019 est.)

1.3% (2018 est.)

2.91% (2017 est.)
2.85% (2019 est.)

2.18% (2018 est.)

2.83% (2017 est.)
GDP - per capita (PPP)$53,919 (2019 est.)

$53,768 (2018 est.)

$53,255 (2017 est.)

note: data are in 2017 dollars
$57,804 (2019 est.)

$56,444 (2018 est.)

$55,517 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 0.7% (2017 est.)

industry: 30.7% (2017 est.)

services: 68.6% (2017 est.)
agriculture: 1.3% (2017 est.)

industry: 22.9% (2017 est.)

services: 75.8% (2017 est.)
Population below poverty line14.8% (2018 est.)12.5% (2018 est.)
Household income or consumption by percentage sharelowest 10%: 3.6%

highest 10%: 24% (2000)
lowest 10%: 9%

highest 10%: 23.4% (2016 est.)
Inflation rate (consumer prices)1.4% (2019 est.)

1.7% (2018 est.)

1.5% (2017 est.)
0.7% (2019 est.)

0.8% (2018 est.)

1.1% (2017 est.)
Labor force44.585 million (2020 est.)2.736 million (2020 est.)
Labor force - by occupationagriculture: 1.4%

industry: 24.2%

services: 74.3% (2016)
agriculture: 2.4%

industry: 18.3%

services: 79.3% (2016 est.)
Unemployment rate4.98% (2019 est.)

5.19% (2018 est.)
3.05% (2019 est.)

3.07% (2018 est.)
Distribution of family income - Gini index31.9 (2016 est.)

30 (1994)
28.7 (2017 est.)

27.5 (2010 est.)
Budgetrevenues: 1.665 trillion (2017 est.)

expenditures: 1.619 trillion (2017 est.)
revenues: 172.5 billion (2017 est.)

expenditures: 168.9 billion (2017 est.)
Industriesamong 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, textileswind turbines, pharmaceuticals, medical equipment, shipbuilding and refurbishment, iron, steel, nonferrous metals, chemicals, food processing, machinery and transportation equipment, textiles and clothing, electronics, construction, furniture and other wood products
Industrial production growth rate3.3% (2017 est.)2.5% (2017 est.)
Agriculture - productsmilk, sugar beet, wheat, barley, potatoes, pork, maize, rye, rapeseed, triticalemilk, wheat, barley, potatoes, sugar beet, pork, rye, rapeseed, oats, poultry
Exports$2,004,158,000,000 (2019 est.)

$1,984,745,000,000 (2018 est.)

$1,937,273,000,000 (2017 est.)
$226.589 billion (2019 est.)

$215.725 billion (2018 est.)

$208.941 billion (2017 est.)
Exports - commoditiescars and vehicle parts, packaged medicines, aircraft, medical cultures/vaccines, industrial machinery (2019)packaged medicines, electric generators, pork, refined petroleum, medical cultures/vaccines (2019)
Exports - partnersUnited States 9%, France 8%, China 7%, Netherlands 6%, United Kingdom 6%, Italy 5%, Poland 5%, Austria 5% (2019)Germany 14%, United States 11%, Sweden 10%, United Kingdom 7%, Norway 6%, Netherlands 5%, China 5% (2019)
Imports$1,804,453,000,000 (2019 est.)

$1,759,299,000,000 (2018 est.)

$1,695,300,000,000 (2017 est.)
$197.818 billion (2019 est.)

$193.107 billion (2018 est.)

$184.338 billion (2017 est.)
Imports - commoditiescars and vehicle parts, packaged medicines, crude petroleum, refined petroleum, medical cultures/vaccines (2019)cars, refined petroleum, packaged medicines, crude petroleum, broadcasting equipment (2019)
Imports - partnersNetherlands 9%, China 8%, France 7%, Belgium 6%, Poland 6%, Italy 6%, Czechia 5%, United States 5% (2019)Germany 21%, Sweden 11%, Netherlands 8%, China 7% (2019)
Debt - external$5,671,463,000,000 (2019 est.)

$5,751,408,000,000 (2018 est.)
$504.808 billion (2019 est.)

$517.972 billion (2018 est.)
Exchange rateseuros (EUR) per US dollar -

0.82771 (2020 est.)

0.90338 (2019 est.)

0.87789 (2018 est.)

0.885 (2014 est.)

0.7634 (2013 est.)
Danish kroner (DKK) per US dollar -

6.16045 (2020 est.)

6.7506 (2019 est.)

6.5533 (2018 est.)

6.7236 (2014 est.)

5.6125 (2013 est.)
Fiscal yearcalendar yearcalendar year
Public debt63.9% of GDP (2017 est.)

67.9% of GDP (2016 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 deposits (AF.2), securities other than shares excluding financial derivatives (AF.3, excluding AF.34), and loans (AF.4); the general government sector comprises the sub-sectors of central government, state government, local government and social security funds; the series are presented as a percentage of GDP and in millions of euros; GDP used as a denominator is the gross domestic product at current market prices; data expressed in national currency are converted into euro using end-of-year exchange rates provided by the European Central Bank
35.3% of GDP (2017 est.)

37.9% of GDP (2016 est.)

note: data cover general government debt and include debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities, as well as intra-governmental debt; intragovernmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment; debt instruments for the social funds are not sold at public auctions
Reserves of foreign exchange and gold$200.1 billion (31 December 2017 est.)

$173.7 billion (31 December 2015 est.)
$75.25 billion (31 December 2017 est.)

$64.25 billion (31 December 2016 est.)
Current Account Balance$280.238 billion (2019 est.)

$297.434 billion (2018 est.)
$30.935 billion (2019 est.)

$24.821 billion (2018 est.)
GDP (official exchange rate)$3,860,923,000,000 (2019 est.)$350.037 billion (2019 est.)
Credit ratingsFitch rating: AAA (1994)

Moody's rating: Aaa (1986)

Standard & Poors rating: AAA (1983)

Credit ratings prior to 1989 refer to West Germany.
Fitch rating: AAA (2003)

Moody's rating: Aaa (1999)

Standard & Poors rating: AAA (2001)
Ease of Doing Business Index scoresOverall score: 79.7 (2020)

Starting a Business score: 83.7 (2020)

Trading score: 91.8 (2020)

Enforcement score: 74.1 (2020)
Overall score: 85.3 (2020)

Starting a Business score: 92.7 (2020)

Trading score: 100 (2020)

Enforcement score: 73.9 (2020)
Taxes and other revenues45% (of GDP) (2017 est.)53% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)1.3% (of GDP) (2017 est.)1.1% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 5.8%

male: 6.6%

female: 4.8% (2019 est.)
total: 10.1%

male: 10.4%

female: 9.7% (2019 est.)
GDP - composition, by end usehousehold consumption: 53.1% (2017 est.)

government consumption: 19.5% (2017 est.)

investment in fixed capital: 20.4% (2017 est.)

investment in inventories: -0.5% (2017 est.)

exports of goods and services: 47.3% (2017 est.)

imports of goods and services: -39.7% (2017 est.)
household consumption: 48% (2017 est.)

government consumption: 25.2% (2017 est.)

investment in fixed capital: 20% (2017 est.)

investment in inventories: -0.2% (2017 est.)

exports of goods and services: 54.5% (2017 est.)

imports of goods and services: -47.5% (2017 est.)
Gross national saving28.5% of GDP (2019 est.)

28.7% of GDP (2018 est.)

28.4% of GDP (2017 est.)
31.5% of GDP (2019 est.)

29.7% of GDP (2018 est.)

29.2% of GDP (2017 est.)

Source: CIA Factbook