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flag Germany Germany: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

Germany is Europe's largest economy, which explains its leading role in managing the current debt crisis of the eurozone. Over the last few years, its performance was not optimal due to the country's vulnerability to outside shocks, domestic structural problems and ongoing difficulties in integrating the formerly communist eastern part. German grew very slowly in 2013 (0.5%), but the outlook for 2014 is better (1.6%).

The German economic indicators are a source for envy. Its current account surplus should reach 7% of the GDP, the social security funds show a suprlus of around 30 billion euro and public finances are also running a slight surplus. The German economic model, which relies on trade (exports of industrial goods), provoked two large debats in 2013, which had to do with trade surplus and the minimum wage. Germany has to do with a pressure to stimulate domestic deman through an increase in investment. The turning away from nuclear energy, which should happen by 2022, will require enormous investment, which will add to the 20 billion euros already allocated for the development of renewable energies in 2013. The new government will probably gradually reduce subsidies. While around 7.3 million people are working precarious, low-paid jobs without welfare protection, a wage increase above the level of inflation is also planned. The main challenge for the German government is still managing the debt crisis of the eurozone.

Despite the recession, Germany has managed to keep its unemployment rate at around 5.2%. However, the challenge of integrating the former East Germany, where unemployment is very high, persists.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 3,631.443,427.853,635.96e3,820.463,908.80
GDP (Constant Prices, Annual % Change) 3.40.90.51.4e1.5
GDP per Capita (USD) 45,20842,5694447,20148,226
General Government Balance (in % of GDP) -1.2-0.10.60.50.5
General Government Gross Debt (in % of GDP) 80.081.078.475.5e72.5
Inflation Rate (%) 2.52.11.6e0.91.2
Unemployment Rate (% of the Labor Force) 6.05.55.35.35.3
Current Account (billions USD) 228.15252.28254.93236.99228.39
Current Account (in % of GDP) 6.37.47.0e6.25.8

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

The German agricultural sector contributes about 1% of the GDP and employs about 1.6% of the active population. The sector has greatly benefitted from State subsidies. Main agricultural products are milk, pork and livestock farming, sugar beet and cereals. Consumers prefer organic agriculture. The country is going through a process of deindustrialization of the food sector. 

The contribution of the industrial sector to the GDP has dropped from 51% in 1970 to about 28% today. However, the German economy still has some specialized sectors such as mechanical engineering, electric and electronic equipment, automotive and chemical products. The automotive industry is one of the country's largest industrial sectors and Germany the world's 3rd largest exporter of cars. German decision to abandon civil nuclear energy by 2022 is also likely to remodel the German industrial landscape.

The tertiary sector contributes about 70% to the GDP. The German economic model relies mainly on a dense network of SMEs; there are more than 3 million of them employing 70% of the salaried workers.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 1.5 28.2 70.2
Value Added (in % of GDP) 0.9 30.7 68.4
Value Added (Annual % Change) -1.9 0.1 0.1

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Euro (EUR) - Average Annual Exchange Rate For 1 USD 0.720.760.720.780.76

Source: CIA - The world factbook - Last Available Data.

 
 

Learn more about Market Analyses about Germany on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
73.4/100
Position:
Mostly Free
World Rank:
18/178
Regional Rank:
8/43

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
7.98
World Rank:
12/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Trade represents more than 95% of Germany’s GDP (WTO average for 2010-2012). With exports representing about 40% of GDP, Germany is a leader in exports (only recently caught up with by China).

In 2013, Germany's trade surplus reached record levels (189.9b euro), with imports decreasing more quickly (-1.2%) than exports (-0.2%). A recovery of exports is expected in 2014 (+4%) and also, to a lesser extent, of imports.

The whole of the European Union is its primary trade partner: around 60% of German exports and 60% of its imports are done with the EU. China and the U.S. are the other two main partners

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 926,3471,054,8141,254,8701,163,2301,187,251
Exports of Goods (million USD) 1,120,0401,258,9241,473,9851,407,0801,452,795
Imports of Services (million USD) 252,543267,605296,848294,818314,737
Exports of Services (million USD) 225,756242,554268,588265,551286,823
Imports of Goods and Services (Annual % Change) -9.612.97.2-0.03.1
Exports of Goods and Services (Annual % Change) -14.314.58.02.81.6
Imports of Goods and Services (in % of GDP) 32.937.140.040.039.8
Exports of Goods and Services (in % of GDP) 37.842.344.845.945.6
Trade Balance (million USD) 198,013213,743227,027253,189279,470
Trade Balance (Including Service) (million USD) 168,097175,890179,799206,117215,948
Foreign Trade (in % of GDP) 70.879.484.886.085.3

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
France 9.0%
United States 8.1%
United Kingdom 6.5%
Netherlands 6.2%
China 6.1%
See More Countries 64.0%
Main Suppliers
(% of Imports)
2013
Netherlands 8.9%
China 8.3%
France 7.1%
United States 5.6%
Italy 5.3%
See More Countries 64.9%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 10.2%
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 3.8%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 3.3%
Powered aircraft e.g. helicopters and aeroplanes;...Powered aircraft e.g. helicopters and aeroplanes; spacecraft, incl. satellites, and suborbital and spacecraft launch vehicles 2.4%
Human blood; animal blood prepared for therapeutic...Human blood; animal blood prepared for therapeutic, prophylactic or diagnostic uses; antisera and other blood fractions and modified immunological products, whether or not obtained by means of biotechnological processes; vaccines, toxins, cultures of micro-organisms (excl. yeasts) and similar products 1.4%
See More Products 78.9%
- bn USD of products imported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 6.2%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 4.4%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 3.4%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 3.1%
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 2.9%
See More Products 80.0%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

- bn USD of services exported in 2011
33.47%
22.60%
14.65%
7.03%
5.53%
5.41%
4.63%
2.42%
2.14%
1.78%
0.34%
- bn USD of services imported in 2011
28.94%
26.21%
23.61%
5.51%
4.44%
3.21%
2.63%
2.60%
1.54%
0.92%
0.40%

Source: Comtrade, Last Available Data

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Sources of General Economic Information

Ministries
Ministry of Finance
Ministry of the Economy and Technology
Ministry of Cooperation and Development
Ministry of Food, Agriculture and Consumer Protection
Ministry of Transport and Digital Infrastructure
Ministry of Culture and Research
Statistical Office
Federal Statistical Office
Central Bank
Deutsche Bundesbank
Stock Exchange
Deutsche Börse Group
Search Engines
Yahoo!
Google
Abacho
Alles Klar
Altavista
Apollo 7
Bellnet
Lostse
Dino
Fireball
Flix
Klug Suchen
Lycos
Metager
NetGuide
Rex
Sharelook
Suchmaschine
Web.de
Economic Portals
German business portal

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Political Outline

Executive Power
The Head of government is the Chancellor, who is elected by absolute majority in the Federal Assembly for a four year term.  The Chancellor holds the executive power, which includes implementing the law and managing the everyday business of the country. The Federal Ministers (Council of Ministers) are appointed by the president on the recommendation of the Chancellor.

The Head of State is the President. He is elected for a five year term by the Federal Convention (which includes the members of the Federal Assembly and an equal number of delegates elected by the provincial legislatures). The role of the president is mainly ceremonial.

Legislative Power
The legislative power in Germany is bicameral. The parliament is made up of two houses: the Federal Assembly (the lower house), with 613 seats, whose members are elected by universal suffrage combining proportional and direct representation, for a four year term. And the Federal Council (upper house), with 69 seats, whose members are delegates from the 16 provinces of the country for a 4 year term. There are no elections for the Federal Council. Its composition is determined by that of the provincial governments. The government depends directly or indirectly on the support of parliament, generally expressed by a vote of confidence. The Chancellor cannot dissolve parliament directly, but he can recommend its dissolution to the president if there is a vote of no confidence within the Federal Assembly. Legislative power belongs both to the government and the parliament. German citizens enjoy considerable political rights.
Main Political Parties
- Christian Democratic Union (CDU): conservatives
- Christian-Social Union (CSU): conservatives
- Social Democratic Party (SPD): social democrats
- Free Democratic Party (FDP): liberals
- Bündnis90/die Gruenen: left/green
Current Political Leaders
President:  Joachim GAUCK (since 18 March 2012) - Independent
Chancellor: Angela MERKEL (in German) (since November 2005) CDU, head of a coalition backed by the CSU and the SPD.
Next Election Dates
Chancellor: December 2017
Presidential: June 2017
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
14/180
Evolution:
3 places up compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
1/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: December 2014