German Economy
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 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 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 5.2% in 2014. The new German government introduced a minimum wage of about $11.60 (8.50 euros) per hour to take effect in 2015. 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 2012 Germany reached a budget surplus of 0.1%. The budget was essentially in balance in 2014. 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. The German economy suffers from low levels of investment, and a government plan to invest 15 billion euros 2016-18, largely in infrastructure, is intended to spur needed private investment. 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 with renewable energy, which accounted for 27.8% of gross electricity consumption in 2014, 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. Extremely low inflation, caused largely by low global energy prices and a weak euro, are expected to boost German GDP growth in 2015.
GDP (purchasing power parity): $3.722 trillion (2014 est.)
GDP (official exchange rate): $3.86 trillion (2014 est.)
GDP - real growth rate: 1.6% (2014 est.)
GDP - per capita (PPP): $45,900 (2014 est.)
GDP - composition by sector: agriculture: 0.9%
industry: 30.8%
services: 68.4% (2014 est.)
Labor force: 42.65 million (2014 est.)
Labor force - by occupation: agriculture: 1.6%
industry: 24.6%
services: 73.8% (2011)
Unemployment rate: 5% (2014 est.)
Household income or consumption by percentage share: lowest 10%: 3.6%
highest 10%: 24% (2000)
Investment (gross fixed): 18.9% of GDP (2008 est.)
Budget: revenues: $1.68 trillion
expenditures: $1.664 trillion (2014 est.)
Public debt: 74.7% of GDP (2014 est.)
Inflation rate (consumer prices): 0.8% (2014 est.)
Central bank discount rate: 0.75% (31 December 2013)
Commercial bank prime lending rate: 2.6% (31 December 2014 est.)
Agriculture - products: potatoes, wheat, barley, sugar beets, fruit, cabbages; cattle, pigs, poultry
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: 1.3% (2014 est.)
Electricity - production: 575.9 billion kWh (2012 est.)
Electricity - consumption: 582.5 billion kWh (2012 est.)
Electricity - exports: 71.43 billion kWh (2013 est.)
Electricity - imports: 39.16 billion kWh (2013 est.)
Oil - production: 97,000 bbl/day (2013 est.)
Oil - consumption: 2.456 million bbl/day (2007 est.)
Oil - exports: 3,907 bbl/day (2012 est.)
Oil - imports: 1.881 million bbl/day (2012 est.)
Oil - proved reserves: 232.6 million bbl (1 January 2014 est.)
Natural gas - production: 11.78 billion cu m (2013 est.)
Natural gas - consumption: 88.44 billion cu m (2013 est.)
Natural gas - exports: 18.82 billion cu m (2013 est.)
Natural gas - imports: 94.91 billion cu m (2013 est.)
Natural gas - proved reserves: 116 billion cu m (1 January 2014 est.)
Current account balance: $287.5 billion (2014 est.)
Exports: $1.547 trillion (2014 est.)
Exports - commodities: machinery, vehicles, chemicals, metals and manufactures, foodstuffs, textiles
Exports - partners: France 9.6%, UK 7.9%, US 6.9%, Netherlands 6.9%, China 5.8%, Austria 5.3%, Italy 5.1%, Poland 4.5%, Switzerland 4.3% (2014)
Imports: $1.319 trillion (2014 est.)
Imports - commodities: machinery, vehicles, chemicals, foodstuffs, textiles, metals
Imports - partners: Netherlands 13.8%, France 8%, China 6.6%, Belgium 6.3%, Italy 5.4%, UK 4.8%, Poland 4.6%, Czech Republic 4.4%, Austria 4.3%, Switzerland 4.1% (2014)
Reserves of foreign exchange and gold: $198.2 billion (31 December 2013 est.)
Debt - external: $5.717 trillion (31 December 2012 est.)
Stock of direct foreign investment - at home: $1.424 trillion (31 December 2014 est.)
Stock of direct foreign investment - abroad: $2.048 trillion (31 December 2014 est.)
Exchange rates: euros (EUR) per US dollar - 0.7489 (2014 est.), 0.7634 (2013 est.),
0.78 (2012 est.), 0.7185 (2011 est.), 0.755 (2010 est.)
economic climate  
Background: Germany is the world's fourth biggest economy and largest exporter. It is a major economy within European Union, which continues to develop greater integration between member states and openness to external trade.
Manufacturing is the core of the Germany economy with the export sector dominated by autos and machinery. New sectors such as IT, biotechnology and renewable energy are growing markedly. Agriculture represents only one per cent of GDP.
Due to events in the global financial sector, Germany’s GDP growth has eased. However, this remains higher than the average of the preceding five years. Germany has good economic resilience due to strong export performance, industrial production and investment in machinery and equipment.
Germany is decentralised, with the three largest cities housing less than 10 per cent of the national population. The 16 states of the Federal Republic hold much of the executive power of government and in turn responsibility for economic development.
Some of the key economic centres are Frankfurt, Hamburg, Munich, Berlin, Stuttgart, Düsseldorf, Cologne and the Ruhr region.
Export opportunities:  
Update: This page was last updated on 10 November 2015
Sources: 1. CIA, The World Factbook, https://www.cia.gov/library/publications/the-world-factbook/geos/ae.html
2. http://www.austrade.gov.au
3. DIBNC Experts Team