Whereas the important role of Germany is often stressed in worldwide media, only a few people are having deeper insight of what makes the German economy stand out. In this series of small reports, we are explaining six main characteristics:
The 4th largest economy in the world
The German economy is often seen as part of the European economy, the European Union or the eurozone, sometimes bundled with other large economies such as the French or British. Anyhow, Germany is a global colossus on its own and the fourth largest economy in the world.1 The German economy dominates in Europe and generates about 20 percent of EU`s Gross Domestic Product.2 Some federal states as for example North-Rhine Westphalia, Bavaria and Baden-Württemberg have a higher GDP than many neighbouring countries.3
Germany belongs to the richest region in Europe, which covers Switzerland and southern Germany, as well as parts of western Austria, eastern France and northern Italy. The city of Hamburg has one of the richest per-head populations in Europe.4
The German economy is export-depending and was hit by the financial crisis but has recuperated in recent years, with year-on-year growth of 2.2 percent in 2017.5 As global growth is slowing down and global value chains become more regional, the German economy is still showing strength and stability.
Traditionally, German GDP has been driven by exports and investments. In recent years, though, consumption has gained importance as a growth driver due to relatively high average incomes, a low unemployment rate and solid economic growth. This trend is expected to continue, and German consumers are expected to stay optimistic.
About the author: Mark Pfeiffer is a German based retail professional, piloting nonfood consumer goods of international companies into German retail.
Photo: Mark Pfeiffer
1 World Bank: Gross domestic product 2016
2 Germany Trade & Invest: Economic Activity, 2016
3 German Federal Statistics Office: Volkswirtschaftliche Gesamtrechnung – Bruttoinlandsprodukt, 2016
4 Eurostat: Europe’s richest and poorest regions, 2013
5 German Federal Statistics Office, Pressemitteilung 011/2018