Basic
The economy of Germany is a highly developed social market economy. It has the largest national
economy in Europe, the fourth-largest by nominal GDP in the world, and fifth by GDP. The Gross
Domestic Product (GDP) in Germany was worth 4223.12 billion US dollars in 2021, according to
official data from the World Bank. The GDP value of Germany represents 3.16 percent of the world
economy.
Germany is the largest economy in the European Union (EU) and the fourth largest in the world after
the USA, China, and Japan. The German economy has its great innovativeness and strong focus on
exports to thank for its competitiveness and global networking. In high-selling sectors, such as car-
making, mechanical and plant engineering, the chemicals industry and medical technology, exports
account for well over half of total sales. In 2018, only China and the USA exported more
goods. Germany’s most important trading partners are the European Union countries, the USA, and
China.
In 2016, Germany recorded the highest trade surplus in the world, worth $310 billion. This economic
result made it the biggest capital exporter globally. Germany is one of the largest exporters
globally with $1810.93 billion worth of goods and services exported in 2019.
Orientation
Germany are vehicles, machinery, chemical goods, electronic products, electrical equipment,
pharmaceuticals, transport equipment, basic metals, food products, and rubber and plastics.
Accounting for more than 99 percent of all companies, small and medium-sized enterprises form the
backbone of the economy and are also characterised by their high share of industrial production.
They supplement the corporations listed primarily in the DAX index at the Frankfurt Stock Exchange,
the most important financial centre in Continental Europe. The European Central Bank, which as an
EU institution amongst other things is the guardian of the euro’s stability, is also headquartered in
Frankfurt/Main.
Employment
The positive economic momentum of the 2010s has led to a favourable trend on the labour market.
Germany is one of the countries with the highest employment rates in the EU and is the country with
the lowest youth unemployment percentage. This underscores the value of dual vocational training,
which has become an export commodity in its own right and is being adapted by many countries.
Factors such as the availability of skilled labour, infrastructure, and legal certainty are further
characteristics of Germany, which is very high on the list in many international rankings.
Corona
As a result of the Coronavirus crisis in the spring of 2020, economic experts expect a sharp economic
downturn, a rise in the unemployment rate and, as a consequence of the financial stabilisation
measures, a record deficit in the national budget. However, in their April 2020 joint forecast the
experts from the major institutes for economic research predict that Germany will cope with the
economic slump and in the medium term achieve economic output levels on a par with what it would
have had without the crisis.
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Tax system
Germany has a varied tax system, with taxes imposed at the national, state, and local levels. Because
of the generous system of social services, tax rates on corporations, individuals, and goods and
services are all relatively high in comparison with other countries. Germany employs a system of tax
equalization, through which tax revenues are distributed from wealthier regions to less-prosperous
ones. After unification, these transfers were resented among many western Germans.
Comparison
Mexico has a GDP per capita of $19,900 as of 2017, while in Germany, the GDP per capita is $50,800
as of 2017. In Mexico, 46.2% live below the poverty line as of 2014. In Germany, however, that
number is 16.7% as of 2015. In Mexico, 3.4% of adults are unemployed as of 2017. In Germany, that
number is 3.8% as of 2017. Mexico has a top tax rate of 35.0% as of 2016. In Germany, the top tax
rate is 47.5% as of 2016.
https://www.britannica.com/place/Germany/Economy
https://tradingeconomics.com/germany/gdp
https://en.wikipedia.org/wiki/Economy_of_Germany
https://tradingeconomics.com/country-list/gdp
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