German Economy

Germany has a powerful technological economy. In 2003, Germany’s GNI per capita was $25,250. It is the twenty-third highest in the world in terms of per capita income: $38,860. The growth rate of GDP has declined annually since the early 1980s.

Germany had considerable economic success in rebuilding its economy after losing World War II. It is now the third largest economic power in the world, after the US and Japan. The fiscal and monetary policy adopted by the government was cautious. The idea was to make a social market economy. This idea demanded the economy to be governed by market forces, the state correcting the imperfections of marketing and helping the underprivileged. A lot of attention was paid to bank financing. Companies could focus on objectives on the long term.

German economy is split into two regions: West Germany and East Germany. In the east, economy is still quite weak. The unemployment rate is double than that in the west. After the unification of West and East Germany in 1990, Germany’s flourishing economy declined.

Manufacturing is an important sector for the German economy. Telecommunications is also becoming an important sector. The most important manufacturing industries are the chemical and the automotive industries. The share of manufacturing in GDP has become stable at 30%, while that of fishing, agriculture or forestry has kept falling, the lowest point being reached in 2002 according to statistics of the World Bank.

Agriculture has little importance for the economy as a whole and the steel-making sector has been declining. Agriculture employed less than 3% of the population in 2004, a decreased number compared to 4% in 1991. Still Germany manages to cover 90% of its nutritional necessities through its domestic production.

Exports account for over 1/3 of the national output, as Germany’s economy is mostly export-oriented. Germany exports mainly chemicals, vehicles, food, beer, machinery, textiles, electronics and metals and imports textiles, machinery, textiles and chemicals. Germany’s largest trade partner is France. The United States of America are the second largest trade partner. Germany imports from the US mostly data processing equipment and aircraft and exports in return motor vehicles, chemicals, machinery and electrical equipment.

The most important German energy resource is coal, although its extraction has diminished since 1989, due to the environmental policy. After United States, China, India and Japan, Germany is the fifth largest energy consumer in the world and the largest in Europe.

I have studied economics for years and love to write about economic trends and conditions. I write for www.economywatch.com and www.economypedia.com.

Article Source: ArticlesBase.com - German Economy