Germany’s Economic Overview:German is the 4th largest economy by nominal GDP and 5th by GDP (PPP) in the world with nominal GDP of $3.684 trillion and GDP (PPP) of $4.170 trillion in 2017 (Wikipedia, 2018). Germany is one of the world’s main economic powers with GDP growth of 2% in 2017. GDP per capita was $44549.
69 and GNI per capita was $51760 in 2017 (World Bank, 2018). The major sector of GDP was agriculture-0.6%, industry-30.1%, services-69.
3% (Wikipedia, 2018). The growth of the GDP is mainly driven by equipment investment and foreign trade. There is high demand of German industrial goods in the world.
Revenues from export have contributed largely to the economic performance of Germany. In 2017, Germany’s public finances reached at peak. Other issues like rising income, low borrowing costs, strong and educated labor market also have contributed to a wave in consumer spending.
According to May 2018, the country’s unemployment rate is 5.1% (World Bank, 2018). It is expected to fall the unemployment rate to 3.
7% by the end of 2018. Also, German will be probably Europe’s top economy in 2018. The inflation rate (CPI) was 1.
7% in 2017 (Wikipedia, 2018). It is one of the most commanding European nations culturally. Germany is known around the world for its rigor engineering and high technology products. Germany’s Trade Patterns:Germany has open market economy. Employment in Germany largely relies on foreign trade; about 30% of jobs are linked to exports either directly or indirectly. German is a member of European Union (EU).
Since 1995, Germany has been a member of World Trade Organization and since 1951 it has been a member of GATT. Germany is one of the most attractive countries for foreign direct investment. But recently due to global economic crisis, FDI of Germany has been hampered. In Germany, about two thirds of world’s trade fairs take place every year. FDI 2016 2017FDI Stock (million USD) 786051 931285FDI Stock (% of GDP) 22.2 N/A (TradePortal, 2018)Germany is the third largest export country in the world.
In 2016, the total value of exported Germany goods and services was $1.27 trillion. In 2018, it increased by 9.3% with total value of export EUR 110.3 billion. The major exports are vehicle, machinery and chemical goods.
Other exported goods are electronic goods, pharmaceuticals, food products, rubber and plastic. The main imports of Germany are machinery, equipment, foodstuffs, vehicles, oil, gas and agriculture products. In 2016, total import was $1.05 trillion.
The total value of import is EUR 89.9 billion which increased by 8.2%.
From many years, Germany is enjoying world’s largest trade surpluses. The main reason behind that is Germany exports goods and services more than it consumes. In 2018, the net value of export surplus is EUR 20.4 billion (TradingEconomics, 2018).
Currency and Exchange Rate:The euro is the official currency of Germany and a member of the European Union. Last five years trends of exchange rate are given below- 2013 2014 2015 2016 2017 Exchange Rate (USD) 1.38 1.21 1.09 1.05 1.20 (FocuseEonomics, 2018)