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The Economy of Germany

German Economy

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Economy - overview: The German economy - the fifth largest economy in the world in PPP terms and Europe's largest - began to contract in the second quarter of 2008 as the strong euro, high oil prices, tighter credit markets, and slowing growth abroad took their toll on Germany's export-dependent economy. At 1.7% in 2008, GDP growth is expected to be negative in 2009. Recent stimulus and lender relief efforts will make demands on Germany's federal budget and undercut plans to balance its budget by 2011. Strong growth in 2007 led unemployment in 2008 to fall below 8%, a new post-reunification low. This suggested the reforms launched by the former government of Chancellor Gerhard SCHOEDER, deemed necessary due to chronically high unemployment and low average growth, had had the desired effect. The current government of Chancellor Angela MERKEL has initiated other reform measures, such as a gradual increase in the mandatory retirement age from 65 to 67 and measures to increase female participation in the labor market. Germany's aging population, combined with high chronic unemployment, has pushed social security outlays to a level exceeding contributions, but higher government revenues from the cyclical upturn in 2006-07 and a 3% rise in the value-added tax cut Germany's budget deficit to within the EU's 3% debt limit. The modernization and integration of the eastern German economy - where unemployment exceeds 30% in some municipalities - continues to be a costly long-term process, however, with annual transfers from west to east amounting to roughly $80 billion. While corporate restructuring and growing capital markets have set strong foundations to help Germany meet the longer-term challenges of European economic integration and globalization, Germany's export-oriented economy has proved a disadvantage in the context of weak global demand.

GDP:

GDP - real growth rate: 1.3% (2008 est.) 2.5% (2007 est.) 3% (2006 est.)

GDP - per capita:

GDP - composition by sector: agriculture: 0.9% industry: 30.1% services: 69% (2008 est.)

Population below poverty line:

Household income or consumption by percentage share: lowest 10%: 3.2% highest 10%: 22.1% (2000)

Distribution of family income - Gini index: 27 (2006)

Inflation rate (consumer prices):

Labor force: 43.62 million (2008 est.)

Labor force - by occupation: agriculture: 2.4% industry: 29.7% services: 67.8% (2005)

Unemployment rate: 7.9% note: this is the International Labor Organization's estimated rate for international comparisons; Germany's Federal Employment Office estimated a seasonally adjusted rate of 10.8% (2008 est.)

Budget: revenues: $1.614 trillion expenditures: $1.579 trillion (2008 est.)

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: 2.2% (2008 est.)

Electricity - production: 594.7 billion kWh (2007 est.)

Electricity - production by source:

Electricity - consumption: 549.1 billion kWh (2006 est.)

Electricity - exports: 62.31 billion kWh (2007 est.)

Electricity - imports: 42.87 billion kWh (2007 est.)

Oil - production: 148,100 bbl/day (2007 est.)

Oil - consumption: 2.456 million bbl/day (2007 est.)

Oil - exports: 563,400 bbl/day (2005)

Oil - imports: 3.026 million bbl/day (2005)

Oil - proved reserves: 367 million bbl (1 January 2008 est.)

Natural gas - production: 17.96 billion cu m (2007 est.)

Natural gas - consumption: 97.44 billion cu m (2007 est.)

Natural gas - exports: 12.22 billion cu m (2007 est.)

Natural gas - imports: 88.35 billion cu m (2007 est.)

Natural gas - proved reserves: 254.8 billion cu m (1 January 2008 est.)

Agriculture - products: potatoes, wheat, barley, sugar beets, fruit, cabbages; cattle, pigs, poultry

Exports: $1.53 trillion f.o.b. (2008 est.)

Exports - commodities: machinery, vehicles, chemicals, metals and manufactures, foodstuffs, textiles

Exports - partners: France 9.7%, US 7.5%, UK 7.3%, Italy 6.7%, Netherlands 6.4%, Austria 5.4%, Belgium 5.3%, Spain 5% (2007)

Imports: $1.202 trillion f.o.b. (2008 est.)

Imports - commodities: machinery, vehicles, chemicals, foodstuffs, textiles, metals

Imports - partners: Netherlands 12%, France 8.6%, Belgium 7.8%, China 6.2%, Italy 5.8%, UK 5.6%, US 4.5%, Austria 4.4% (2007)

Debt - external: $4.489 trillion (30 June 2007)

Economic aid - recipient:

Currency:

Currency code:

Exchange rates: euros (EUR) per US dollar - 0.6827 (2008 est.), 0.7345 (2007), 0.7964 (2006), 0.8041 (2005), 0.8054 (2004)

Fiscal year: