Germany

Economic and political outline

Economic indicators | Foreign Trade in figures | Sources of economic information | Political outline

Economic indicators

Germany is the 3rd largest economy in the world and the largest in Europe. Over the last few years, its performance has not been dynamic because of the country's vulneralbility to outside shocks, domestic structural problems and permanent difficulties integrating the eastern part, which used to be Communist. The new coalition government led by Chancellor Angela Merkel is supported by a large parliamentary majority and it is expected to put through several reforms on social charges and medical care, in order to redress public finances. Unemployment remains high at almost 8%. The Germans often describe their economic system as a "social market economy", bringing a wide range of social services while encouraging competition and free enterprise.

GDP Indicators	2004	2005	2006	2007	2008
GDP (billions USD)	2,749.19	2,796.22	2,915.87	3,259.21e	3,414.63e
GDP (constant prices, annual % change)	1.1	0.8	2.9	2.4e	2.0e
GDP per capita (USD)	33,323.22	33,919.09	35,432.74	39,649.78e	41,580.96e
General government balance (in % of GDP)	-3.8	-3.4	-1.6	-0.2e	-0.5e
Inflation rate (%)	1.8	1.9	1.8	2.1e	1.8e
Unemployment rate (% of the labor force)	9.2	9.1	8.1	6.5	6.3
Current Account (billions USD)	117.99	128.38	147.13	175.37e	174.14e
Current Account (in % of GDP)	4.3	4.6	5.0	5.4e	5.1e

Source: IMF - World Economic Outlook Database

Note: (e) Estimated data

Socio-demographic indicators	2006	2007	2008
Unemployment rate (%)	8.1	6.5	6.3

Source:

Main sectors of industry

The German agricultural sector contributes about 1% to GDP and employs about 3% of the active population. The sector has greatly benefitted from State subsidies. Main agricultural products are milk, pork and livestock breeding, sugar beet and cereals. Consumers prefer organic agriculture. The country is going through a process of de-industrialization; the contribution of the industrial sector to GDP has therefore dropped from 51% in 1970 to about 29% today. However, the German economy still has some specialized sectors such as mechanical engineering, electric and electronic equipment, automobiles and chemical products. Its automobile industry is one of the country's largest industrial sectors, and it is the 3rd exporter of cars in the world. The tertiary sector contributes about 70% to GDP. The German economic model rests especially on a dense network of SMEs; there are more than 3 million of them and they employ 70% of salaried workers.

Breakdown of economic activity by sector	Agriculture	Industry	Services
Value added (annual % change)	-4.9	1.8	1.0
Value added (in % of GDP)	0.9	29.7	69.4
Employment by sector (in % of total employment)	2.4	29.7	67.8

Source: World Bank - World Development Indicators - last available data.

Monetary indicators	2002	2003	2004	2005	2006
Average annual exchange rate for 1 USD	1.06	0.89	0.81	0.80	0.80

Source: World Bank - World Development Indicators

Foreign trade in figures

With exports representing 38.9% of GDP and a very active balance of foreign trade (+164 billion EUR), Germany is an export champion. The whole of the European Union is its leading trade partner. More precisely, commercial relations are distributed between 47.8% of imports and 53.1% of exports with the 15 earlier members of the EU and between 9.8% of imports and 9.3% of exports with the new member States.

Foreign trade indicators	2002	2003	2004	2005	2006
Imports of goods (millions USD)	484,024	600,061	718,051	789,773	934,036
Exports of goods (millions USD)	609,779	744,806	903,447	978,181	1,131,362
Imports of services (millions USD)	145,158	172,837	195,272	207,218	220,840
Exports of services (millions USD)	103,144	123,659	145,963	157,576	174,955
Imports of goods and services (annual % change)	-1.4	5.1	7.0	5.3	n.c.
Exports of goods and services (annual % change)	4.2	2.4	9.3	6.3	n.c.
Imports of goods and services (in % of GDP)	31.2	31.7	33.1	35.1	n.c.
Exports of goods and services (in % of GDP)	35.7	35.7	38.0	40.1	n.c.
Trade Balance (millions USD)	125,755	144,745	185,396	188,407	197,325
Trade Balance (including service) (millions USD)	83,741	95,567	136,087	138,765	151,440
Current Account (millions USD)	40,710	46,594	117,929	128,959	146,874
Current Account (in % of GDP)	2.0	1.9	4.3	4.6	5.1
Foreign trade (in % of GDP)	66.9	67.4	71.1	75.3	n.c.

Source: World Bank - World Development Indicators

Main partner countries

Main customers (% of exports)	2006
France	9.5%
United States	8.7%
United Kingdom	7.2%
Italy	6.6%
Netherlands	6.3%

Main suppliers (% of imports)	2006
France	8.5%
Netherlands	8.3%
China	6.8%
United States	6.7%
Italy	5.7%

Source: 2006

Main products

Main exports (% of exports)	2006
Machinery and mechanical appliances	18.9%
Vehicles other than railway or tramway	16.5%
Electrical machinery and equipment	10.8%
Plastics	4.5%
Photographic, cinematographic, measuring and medical instruments	4.1%

Main imports (% of imports)	2006
Machinery and mechanical appliances	13.3%
Mineral fuels, mineral oils	12.1%
Electrical machinery and equipment	11.5%
Vehicles other than railway or tramway	8.4%

Source: 2006

To see more products: More imports (Intracen Data)
More exports (Intracen Data)

Sources of 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, Building and Urban Affairs Ministry of Culture and Research
Statistical Office: Statistisches Bundesamt
Central Bank: Deutsche Bundesbank
Stock Exchange: Deutsche Börse Group
Online newspapers: Handelsblatt
Financial Times Deutschland
Frankfurter Allgemeine Zeitung
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Economic portals: German business portal

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 : Horst KOEHLER (since July 2004) CDU, elected for 5 years,
Chancellor : Angela MERKEL (since November 2005) CDU, head of a coalition backed by the CSU and the SPD.

Next election dates