The Economy of Germany


GDP growth in the past 10 years

Germany’s GDP growth has been relatively stable in the past 10 years, with an average annual growth rate of around 1.3%. However, this growth rate has been lower than that of China and the US, which have seen higher growth rates of around 6-7% and 2-3%, respectively. Europe as a whole has experienced slower growth rates, with an average annual growth rate of around 1%.

Inflation trend in the past 10 years

Germany has maintained a low and stable inflation rate in the past 10 years, with an average annual inflation rate of around 1.3%. The country follows a conservative monetary policy, and its central bank, the Bundesbank, has been known for its emphasis on price stability.

Unemployment rate trend in the past 10 years:

Germany has seen a gradual decline in its unemployment rate over the past 10 years, with the rate falling from 7.7% in 2011 to 3.2% in 2021. The country has a well-developed labor market, with strong protections for workers and a focus on vocational training.

Wage growth trend in the past 10 years:

Wage growth in Germany has been relatively modest in the past 10 years, with an average annual growth rate of around 2%. This growth rate has been lower than that of China, which has seen average annual wage growth rates of around 7-8%.

Housing market, and major indicator:

Germany’s housing market has been experiencing a boom in recent years, with rapidly rising prices in major cities like Berlin and Munich. The country has implemented policies to promote affordable housing, but supply has not kept up with demand, leading to high prices and concerns about affordability.

Germany’s top 3 components of GDP are:

  1. Consumption (private and public): $2.9 trillion, 56.7% of GDP
  2. Investment (including capital goods and construction): $1.1 trillion, 21.4% of GDP
  3. Net exports (exports minus imports): $437 billion, 8.5% of GDP

Germany’s consumption and investment components are similar to those of other developed countries like the US and Europe, but its net exports component is higher due to its strong manufacturing sector and export-oriented economy.

Balance of trade trend, comparing with target countries:

Germany has consistently maintained a large trade surplus in recent years, driven by its strong export sector. This surplus has been a source of tension with other countries, particularly the US, which has accused Germany of engaging in unfair trade practices.

Top 10 import:

  1. China – electronic equipment, machinery, textiles, toys – $116.7 billion
  2. Netherlands – refined petroleum, crude petroleum, natural gas, coal – $94.7 billion
  3. United States – machinery, electronic equipment, vehicles, aircraft – $60.2 billion
  4. France – vehicles, pharmaceuticals, machinery, electronic equipment – $52.4 billion
  5. Belgium – diamonds, petroleum, pharmaceuticals, vehicles – $50.6 billion
  6. Italy – machinery, electronic equipment, pharmaceuticals, vehicles – $49.5 billion
  7. United Kingdom – machinery, electronic equipment, vehicles, pharmaceuticals – $44.9 billion
  8. Austria – machinery, electronic equipment, vehicles, pharmaceuticals – $26.8 billion
  9. Switzerland – gold, pharmaceuticals, machinery, electronic equipment – $25.7 billion
  10. Czech Republic – machinery, electronic equipment, vehicles, pharmaceuticals – $24.1 billion

Top 10 export:

  1. United States – vehicles, machinery, electronic equipment, pharmaceuticals – $119.6 billion
  2. France – vehicles, machinery, electronic equipment, pharmaceuticals – $107.3 billion
  3. United Kingdom – vehicles, machinery, electronic equipment, pharmaceuticals – $96.4 billion
  4. China – vehicles, machinery, electronic equipment, pharmaceuticals – $96.1 billion
  5. Netherlands – vehicles, machinery, electronic equipment, pharmaceuticals – $83.9 billion
  6. Italy – vehicles, machinery, electronic equipment, pharmaceuticals – $57.4 billion
  7. Austria – vehicles, machinery, electronic equipment, pharmaceuticals – $50.7 billion
  8. Switzerland – vehicles, machinery, electronic equipment, pharmaceuticals – $47.9 billion
  9. Poland – vehicles, machinery, electronic equipment, pharmaceuticals – $42.3 billion
  10. Belgium – vehicles, machinery, electronic equipment, pharmaceuticals – $40.8 billion

Top 3 natural resources of the country, and major product of these resources:

  1. Coal – used in energy production and steel manufacturing
  2. Natural gas – used in energy production, heating and transportation
  3. Timber – used in construction, paper production and furniture manufacturing

Top 3 political risk in the past 10 years, in point form:

  1. Brexit and its impact on trade and economic relations with the UK
  2. The European debt crisis and its impact on the stability of the Eurozone
  3. The rise of far-right political movements and its potential impact on European unity and stability

The geopolitical relationship with US, Europe, and China: Germany has historically maintained strong political and economic ties with both the United States and Europe, as well as increasingly important economic ties with China. However, recent tensions between the US and China have led Germany to balance its relationships with these two major global powers. Germany is a key member of the European Union and works closely with other EU member states on issues such as trade and foreign policy.

Top 3 Germany’s major natural resources or commodities import from oversea

  1. Crude petroleum – $32.4 billion – primarily imported from Russia, followed by Norway and the UK [3]
  2. Refined petroleum – $24.4 billion – primarily imported from the Netherlands, followed by Russia and the UK [3]
  3. Petroleum gas – $14.6 billion – primarily imported from the Netherlands, followed by Norway and Russia [3]

Germany’s 3 major sources of electricity generation and the use of commodities are:

  1. Fossil fuels: Coal, natural gas, and oil are still the primary sources of electricity generation in Germany, accounting for about 50% of the country’s electricity production in 2021 [1]. Germany is a major importer of coal, with most of it coming from Russia, Colombia, and the United States. Natural gas is mainly imported from Russia, the Netherlands, and Norway, while crude oil is imported from Russia, Norway, and the United Kingdom [2].
  2. Renewables: Germany is a leader in the development and use of renewable energy sources such as wind, solar, and biomass. In 2021, renewables accounted for about 46% of Germany’s electricity generation [1]. The use of commodities for renewable energy generation includes silicon for solar panels, steel for wind turbines, and wood chips for biomass energy.
  3. Nuclear: Germany has been phasing out its nuclear power plants since 2011, and nuclear energy accounted for less than 4% of the country’s electricity production in 2021 [1]. The use of commodities for nuclear energy generation includes uranium for nuclear fuel.

References: [1] https://www.cleanenergywire.org/factsheets/germanys-energy-consumption-and-power-mix-charts [2] https://www.worldstopexports.com/germany-imports-by-country/