Economy of Germany

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Economy of Germany

Frankfurt, the financial capital of Germany

Currency Euro (EUR, €)

Fiscal year Calendar year

Trade organisations EU, WTO, G-20, G7 and OECD

Country group Developed/Advanced[1]

High-income economy[2]

Statistics

Population  83,756,658 (1 January 2022)[3]

GDP  $4.03 trillion (nominal; 2022)[4]

 $5.3 trillion (PPP; 2022)[4]

GDP rank 4th (nominal, 2022)

5th (PPP, 2022)

GDP growth  2.6% (2021)[5]

 1.5% (2022f)[5]

 –0.3% (2023f)[5]
GDP per capita  $48,398 (nominal; 2022)[4]

 $63,835 (PPP; 2022)[4]

GDP per capita rank 20th (nominal, 2022)

18th (PPP, 2022)

GDP by sector agriculture: 0.7%
 industry: 30.7%

services: 68.6%

(2017 est.)[6]
GDP by component Household consumption: 53.1%

Government consumption: 19.5%

Investment in fixed capital: 20.4%

Investment in inventories: −0.5%

Exports of goods and services: 47.3%

Imports of goods and services: −38.7%

(2017 est.)[6]
Inflation (CPI)  10.0% (September 2022)
Population  17.4% at risk of poverty or social exclusion (AROPE,
below poverty line
2019)[7]
Gini coefficient  29.7 low (2019, Eurostat)[8]
Human Development  0.942 very high (2021)[9] (9th)
Index
 0.883 very high IHDI (2021)[10]
Labour force  42.3 million (August 2020)[11]

 68.3% employment rate (August 2020)[11]

Labour force by agriculture: 1.4%
occupation
industry: 24.2%

services: 74.3%

(2016)[6]

Unemployment  4.4% (August 2020)[11]

 5.8% youth unemployment (August 2020)[11]

 2.0 million unemployed (August 2020)[11]
Average gross salary €4,168 monthly (2021)

Average net salary €2,647 monthly (2021)

Main industries Iron

steel

coal

cement

chemicals

machinery

vehicles

machine tools
 electronics

automobiles

food and beverages

shipbuilding

textiles
Ease-of-doing-  22nd (very easy, 2020)[12]
business rank

External

Exports  $1.62 trillion (2021)[13][6]

Export goods motor vehicles, machinery, chemicals, computer and

electronic products, electrical equipment, pharmaceuticals,

metals, transport equipment, foodstuffs, textiles, rubber and

plastic products
Main export partners  United States 8.71%

 China 8.01%

 France 7.61%

 Netherlands 6.39%

 United Kingdom 5.61%

 Poland 5.12%

(2020)[13][6]

Imports  $1.17 trillion (2020)[14][6]

Import goods machinery, data processing equipment, vehicles, chemicals,

oil and gas, metals, electric equipment, pharmaceuticals,

foodstuffs, agricultural products

Main import partners  China 10.1%

 Netherlands 9.52%

 Poland 6.6%

 France 5.89%

 Italy 5.61%

 Czechia 5.48%

(2020)[14][6]
FDI stock  $1.653 trillion (31 December 2017 est.)[6]

 Abroad: $2.298 trillion (31 December 2017 est.)[6]

Current account  $280 billion (2019 est.)[6]
Gross external debt $5.084 trillion (31 March 2017)[15]

Public finances
 Public debt  59.8% of GDP (2019)[16]

 €2.053 trillion (2019)[16]

Budget balance €49.8 billion surplus (2019)[16]

+1.4% of GDP (2019)[16]

Revenues 46.8% of GDP (2019)[16]

Expenses 45.4% of GDP (2019)[16]

Economic aid donor: ODA, $24.67 billion (2016)[17]

Credit rating Standard & Poor's:[18][19]

AAA

Outlook: Stable

Moody's:[19]

Aaa

Outlook: Stable

Fitch:[19]

AAA

Outlook: Stable

Scope:[20]

AAA

Outlook: Stable
Foreign reserves $400 Billion (June 2020)[21]

All values, unless otherwise stated, are in US dollars.

The economy of Germany is a highly developed social market economy.[22] It has the

largest national economy in Europe, the fourth-largest by nominal GDP in the world,
and fifth by GDP (PPP). In 2017, the country accounted for 28% of the euro area
economy according to the International Monetary Fund (IMF).[23] Germany is a founding
member of the European Union and the Eurozone.[24][25]
In 2016, Germany recorded the highest trade surplus in the world, worth $310 billion.
[26]
 This economic result made it the biggest capital exporter globally. [27] Germany is one
of the largest exporters globally with $1810.93 billion worth of goods and services
exported in 2019.[28][29] The service sector contributes around 70% of the total GDP,
industry 29.1%, and agriculture 0.9%. Exports accounted for 41% of national output. [30]
[needs update][31]
 The top 10 exports of Germany are vehicles, machinery, chemical goods,
electronic products, electrical equipment, pharmaceuticals, transport equipment, basic
metals, food products, and rubber and plastics.[32] The economy of Germany is
the largest manufacturing economy in Europe, and it is less likely to be affected by a
financial downturn.[33] Germany conducts applied research with practical industrial value
and sees itself as a bridge between the latest university insights and industry-specific
 product and process improvements. It generates a great deal of knowledge in its own
laboratories.[34]
Germany is rich in timber, lignite, potash and salt. Some minor sources of natural
gas are being exploited in the state of Lower Saxony. Until the German reunification,
the German Democratic Republic mined for uranium in the Ore Mountains (see
also: SAG/SDAG Wismut). Energy in Germany is sourced predominantly by fossil
fuels (30%), with wind power in second place, then nuclear power, gas, solar, biomass
(wood and biofuels) and hydro.[35] Germany is the first major industrialized nation to
commit to the renewable energy transition called Energiewende. Germany is the leading
producer of wind turbines in the world.[36] Renewables produced 46% of electricity
consumed in Germany (as of 2019).[37] 99 percent of all German companies belong to
the German "Mittelstand", small and medium-sized enterprises, which are mostly family-
owned. Of the world's 2000 largest publicly listed companies measured by revenue,
the Fortune Global 2000, 53 are headquartered in Germany, with the Top 10
being Allianz, Daimler, Volkswagen, Siemens, BMW, Deutsche
Telekom, Bayer, BASF, Munich Re and SAP.[38]
Germany is the world's top location for trade fairs. [39] Around two thirds of the world's
leading trade fairs take place in Germany. [40] The largest annual international trade fairs
and congresses are held in several German cities such
as Hanover, Frankfurt, Cologne, Leipzig and Düsseldorf.

Contents

 1History
o 1.1Age of Industrialization
o 1.2Weimar Republic and Third Reich
o 1.3West Germany
o 1.4East Germany
o 1.5Federal Republic
 2Data
o 2.1Companies
o 2.2Mergers and acquisitions
 3Economic region
o 3.1German states
o 3.2Wealth
 4Sectors
o 4.1Primary
o 4.2Industry
o 4.3Services
 5Government finances
 6Infrastructure
o 6.1Energy
o 6.2Transport
 7Technology
 8Challenges
 9See also
 10References
 11Notes
 12Further reading
 13External links

History[edit]
Main article: Economic history of Germany

Real GDP per capita development in Germany since 1820

Age of Industrialization[edit]
Main article: Industrialization in Germany
The Industrial Revolution in Germany got underway approximately a century later than
in the United Kingdom, France, and Belgium, partly because Germany only became
a unified country in 1871.[41]

Train factory of August Borsig in 1847

 

Many companies, such as steam-machine producer J. Kemna, modeled themselves on English

industry.
 


 The invention of the automobile. Bertha Benz and Karl Benz in a Benz Viktoria, model 1894.
 

The invention of the cruise ship. Albert Ballin's SS Auguste Viktoria in 1890.

 

Railway construction as an expression of the Industrial Revolution (here the Bonn-Cölner

railway around 1844)
The establishment of the Deutscher Zollverein (German Customs Union) in 1834 and
the expansion of railway systems were the main drivers of Germany's industrial
development and political union. From 1834, tariff barriers between increasing numbers
of the Kleindeutschland German states were eliminated.[citation needed] In 1835 the first German
railway linked the Franconian cities of Nuremberg and Fürth – it proved so successful
that the decade of the 1840s saw "railway mania" in all the German states. Between
1845 and 1870, 8,000 kilometres (5,000 mi) of rail had been built and in 1850 Germany
was building its own locomotives. Over time, other German states joined the customs
union and started linking their railroads, which began to connect the corners of
Germany. The growth of free trade and a rail system across Germany intensified
economic development which opened up new markets for local products, created a pool
of middle managers,[clarification needed] increased the demand for engineers, architects, and
skilled machinists, and stimulated investments in coal and iron. [42]
Another factor that propelled German industry forward was the unification of the
monetary system, made possible in part by political unification. The Deutsche Mark, a
new monetary coinage system backed by gold, was introduced in 1871. However, this
system did not fully come into use as silver coins retained their value until 1907. [43]
The victory of Prussia and her allies over Napoleon III of France in the Franco-Prussian
War of 1870-1871 marked the end of French hegemony in Europe and resulted in the
proclamation of the German Empire in 1871. The establishment of the empire inherently
presented Europe with the reality of a new populous and industrializing polity
possessing a considerable, and undeniably increasing, economic and diplomatic
presence. The influence of French economic principles produced important institutional
reforms in Germany, including the abolition of feudal restrictions on the sale of large
landed estates, the reduction of the power of the guilds in the cities, and the introduction
of a new, more efficient commercial law. Nonetheless, political decisions about the
economy of the empire were still largely controlled by a coalition of "rye and iron", that is
the Prussian Junker landowners of the east and the Ruhr heavy industry of the west.[44]
Regarding politics and society, between 1881 and 1889 Chancellor Otto von
Bismarck promoted laws that provided social insurance and improved working
conditions. He instituted the world's first welfare state. Germany was the first to
introduce social insurance programs including universal healthcare, compulsory
education, sickness insurance, accident insurance, disability insurance, and a
retirement pension. Moreover, the government's universal education policy bore fruit
with Germany achieving[when?] the highest literacy rate in the world – 99% – education
levels that provided the nation with more people good at handling numbers, more
engineers, chemists, opticians, skilled workers for its factories, skilled managers,
knowledgeable farmers, and skilled military personnel. [45]
By 1900 Germany surpassed Britain and the United States in steel production. The
German economic miracle was also intensified by unprecedented population growth
from 35 million in 1850 to 67 million in 1913. From 1895 to 1907, the number of workers
engaged in machine building doubled from half a million to well over a million. Only 40
percent of Germans lived in rural areas by 1910, a drop from 67% at the birth of the
Empire. Industry accounted for 60 percent of the gross national product in 1913. [46] The
German chemical industry became the most advanced in the world, and by 1914 the
country was producing half the world's electrical equipment.
The rapid advance to industrial maturity led to a drastic shift in Germany's economic
situation – from a rural economy into a major exporter of finished goods. The ratio of the
finished product to total exports jumped from 38% in 1872 to 63% in 1912. By 1913
Germany had come to dominate all the European markets. By 1914 Germany had
become one of the biggest exporters in the world. [47]
Weimar Republic and Third Reich[edit]
Main article: Economy of Nazi Germany

Gross national product and GNP deflator, year on year change in %, 1926 to 1939, in Germany. Via google to
Pdf-file of German publication.
Occupation by administrative district in the 1925 census

The Nazis rose to power while unemployment was very high, [48] but achieved full
employment later thanks to massive public works programs such as
the Reichsbahn, Reichspost and the Reichsautobahn projects.[49] In 1935 rearmament in
contravention of the Treaty of Versailles added to the economy.[48][50]
The post-1931 financial crisis economic policies of expansionary fiscal policies (as
Germany was off the gold standard) was advised by their non-Nazi Minister of
Economics, Hjalmar Schacht,[48] who in 1933 became the president of the central
bank. Hjalmar Schacht later abdicated from the post in 1938 and was replaced
by Hermann Göring.
The trading policies of the Third Reich aimed at self-sufficiency but with a lack of raw
materials Germany would have to maintain trade links but
on bilateral preferences, foreign exchange controls, import quotas, and export
subsidies under what was called the "New Plan"(Neuer Plan) of 19 September 1934.
[51]
 The "New Plan" was based on trade with less developed countries who would trade
raw materials for German industrial goods saving currency. [52] Southern Europe was
preferable to Western Europe and North America as there could be no trade blockades.
[53]
 This policy became known as the Grosswirtschaftsraum ("greater economic area")
policy.
Eventually, the Nazi party developed strong relationships with big business[54] and
abolished trade unions in 1933 in order to form the Reich Labor Service (RAD), German
Labor Front (DAF) to set working hours, Beauty of Labour (SDA) which set working
conditions and Strength through Joy (KDF) to ensure sports clubs for workers.[55]
West Germany[edit]
See also: Wirtschaftswunder
The Volkswagen Beetle was an icon of West German reconstruction.

Beginning with the replacement of the Reichsmark with the Deutsche Mark as legal

tender, a lasting period of low inflation and rapid industrial growth was overseen by the
government led by German Chancellor Konrad Adenauer and his minister of
economics, Ludwig Erhard, raising West Germany from total wartime devastation to one
of the most developed nations in modern Europe.
In 1953 it was decided that Germany was to repay $1.1 billion of the aid it had received.
The last repayment was made in June 1971.
Apart from these factors, hard work and long hours at full capacity among the
population in the 1950s, 1960s, and early 1970s and extra labor supplied by thousands
of Gastarbeiter ("guest workers") provided a vital base for the economic upturn.
East Germany[edit]
Main article: Economy of the German Democratic Republic
By the early 1950s, the Soviet Union had seized reparations in the form of agricultural
and industrial products and demanded further heavy reparation payments. [56] Silesia with
the Upper Silesian Coal Basin, and Stettin, a prominent natural port, were lost
to Poland.
Exports from West Germany exceeded $323 billion in 1988. In the same year, East
Germany exported $30.7 billion worth of goods; 65% to other communist states. [57] East
Germany had zero unemployment.[57]
Federal Republic[edit]

As of 2013, Germany is the third-largest exporter and third-largest importer in the world, producing the largest
trade surplus as a national economy.

The German economy practically stagnated in the beginning of the 2000s. The worst
growth figures were achieved in 2002 (+1.4%), in 2003 (+1.0%) and in 2005 (+1.4%).
[58]
 Unemployment was also chronically high. [59] Due to these problems, together
with Germany's aging population, the welfare system came under considerable strain.
This led the government to push through a wide-ranging program of belt-tightening
reforms, Agenda 2010, including the labor market reforms known as Hartz I - IV.[59]
In the later part of the first decade of 2000, the world economy experienced high growth,
from which Germany as a leading exporter also profited. Some credit the Hartz reforms
with achieving high growth and declining unemployment but others contend that they
resulted in a massive decrease in standards of living and that its effects are limited and
temporary.[59]
The nominal GDP of Germany contracted in the second and third quarters of 2008,
putting the country in a technical recession following a global and European
recession cycle.[60] German industrial output dropped to 3.6% in September vis-à-vis
August.[61][62] In January 2009 the German government under Angela Merkel approved a
€50 billion ($70 billion) economic stimulus plan to protect several sectors from a
downturn and a subsequent rise in unemployment rates. [63] Germany exited the
recession in the second and third quarters of 2009, mostly due to rebounding
manufacturing orders and exports - primarily from outside the Euro Zone - and relatively
steady consumer demand.[59]
Germany is a founding member of the EU, the G8 and the G20, and was the world's
largest exporter from 2003 to 2008. In 2011 it remained the third largest exporter[64] and
third largest importer.[65] Most of the country's exports are in engineering, especially
machinery, automobiles, chemical goods and metals. [66] Germany is a leading producer
of wind turbines and solar-power technology.[67] Annual trade fairs and congresses are
held in cities throughout Germany.[68] 2011 was a record-breaking year for the German
economy. German companies exported goods worth over €1 trillion ($1.3 trillion), the
highest figure in history. The number of people in work has risen to 41.6 million, the
highest recorded figure.[69]
Through 2012, Germany's economy continued to be stronger relative to local
neighboring nations.[70]

Data[edit]
The following table shows the main economic indicators in 1980–2021 (with IMF staff
estimates in 2022–2027). Inflation below 5% is in green. [71]
GDP GDP
GDP Inflation Unemploymen Government
GDP per GDP per
growth rate t debt
Year capita (in Bil.
capita
(in Bil. US$nominal) (in
(in US$ (in US$ (real) (in Percent) (in % of GDP)
US$PPP) Percent)
PPP) nominal)

1980 855.3 11,130.4 853.7 11,109.7 1.3% 5.4% 3.4% n/a

12,174 9,329.
1981 937.2 718.3 0.1% 6.3% 4.8% n/a
.0 6
12,833 9,015.
1982 987.3 693.5 -0.8% 5.3% 6.7% n/a
.5 0
1,041. 13,590 9,025.
1983 691.9 1.6% 3.3% 8.1% n/a
9 .8 2
1,110. 14,537 8,537.
1984 651.9 2.8% 2.4% 8.1% n/a
0 .9 8
1,170. 15,364 8,678.
1985 661.0 2.2% 2.1% 8.1% n/a
2 .3 9
 1,222. 16,041 12,387
1986 944.1 2.4% -0.1% 7.8% n/a
7 .5 .0
1,271. 16,676 15,411
1987 1,174.9 1.5% 0.2% 7.8% n/a
3 .8 .5
1,365. 17,801 16,514
1988 1,266.6 3.7% 1.3% 7.7% n/a
3 .4 .7
1,474. 19,033 16,232
1989 1,257.4 3.9% 2.8% 6.8% n/a
4 .2 .1
1,617. 20,482 20,249
1990 1,598.6 5.7% 2.7% 6.2% n/a
1 .9 .1
1,755. 21,951 23,453
1991 1,875.6 5.0% 3.5% 5.5% 39.0%
6 .9 .1
1,830. 22,733 26,538
1992 2,136.3 1.9% 5.0% 6.6% 41.5%
0 .4 .0
1,855. 22,917 25,603
1993 2,072.5 -1.0% 4.5% 7.8% 45.1%
1 .9 .0
1,940. 23,909 27,233
1994 2,209.9 2.4% 2.7% 8.4% 47.5%
2 .4 .5
2,011. 24,738 31,829
1995 2,588.0 1.5% 1.7% 8.2% 54.9%
4 .0 .6
2,064. 25,347 30,664
1996 2,498.1 0.8% 1.3% 8.9% 57.8%
9 .0 .3
2,138. 26,230 27,170
1997 2,214.7 1.8% 1.5% 9.7% 58.9%
0 .3 .7
2,205. 27,082 27,528
1998 2,242.1 2.0% 0.6% 9.4% 59.5%
8 .8 .2
2,279. 27,990 26,984
1999 2,197.1 1.9% 0.6% 8.6% 60.4%
1 .7 .2
2,398. 29,443 23,924
2000 1,948.8 2.9% 1.4% 8.0% 59.3%
4 .7 .9
2,493. 30,592 23,869
2001 1,945.8 1.7% 1.9% 7.8% 58.2%
8 .1 .8
2,527. 30,983 25,460
2002 2,077.0 -0.2% 1.3% 8.6% 59.9%
6 .3 .3
2,559. 31,384 30,668
2003 2,501.0 -0.7% 1.1% 9.7% 63.5%
3 .1 .8
2,659. 32,645 34,534
2004 2,813.1 1.2% 1.8% 10.3% 65.2%
2 .2 .8
2,762. 33,963 35,020
2005 2,848.4 0.7% 1.9% 11.0% 67.5%
5 .1 .2
2006 2,956. 36,419 2,994.9 36,894 3.8% 1.8% 10.0% 66.9%
 3 .4 .5
3,126. 38,605 42,299
2007 3,426.0 3.0% 2.3% 8.5% 64.2%
7 .1 .9
3,217. 39,835 46,367
2008 3,744.9 1.0% 2.8% 7.4% 65.7%
3 .3 .9
3,053. 37,939 42,338
2009 3,407.6 -5.7% 0.2% 7.2% 73.2%
5 .0 .7
3,219. 40,100 42,379
2010 3,402.4 4.2% 1.1% 6.6% 82.0%
5 .8 .7
3,415. 42,541 46,697
2011 3,748.7 3.9% 2.5% 5.5% 79.4%
0 .2 .4
3,487. 43,359 43,883
2012 3,529.4 0.4% 2.2% 5.1% 80.7%
2 .4 .4
3,628. 44,993 46,299
2013 3,733.9 0.4% 1.6% 5.0% 78.3%
6 .7 .4
3,807. 47,011 48,035
2014 3,890.1 2.2% 0.8% 4.7% 75.3%
1 .1 .8
3,890. 47,622 41,107
2015 3,357.9 1.5% 0.7% 4.4% 71.9%
1 .3 .2
4,164. 50,574 42,124
2016 3,468.9 2.2% 0.4% 3.9% 69.0%
7 .2 .2
4,411. 53,373 44,636
2017 3,689.5 2.7% 1.7% 3.6% 64.6%
7 .9 .8
4,561. 55,021 47,961
2018 3,976.2 1.0% 1.9% 3.2% 61.3%
6 .0 .0
4,692. 56,468 46,798
2019 3,888.7 1.1% 1.4% 3.0% 58.9%
1 .0 .8
4,573. 54,993 46,735
2020 3,886.6 -3.7% 0.4% 3.6% 68.0%
3 .4 .3
4,888. 58,757 51,237
2021 4,262.8 2.6% 3.2% 3.6% 69.6%
4 .2 .6
5,316. 63,834 48,397
2022 4,031.1 1.5% 8.5% 2.9% 71.1%
9 .9 .8
5,490. 65,865 49,430
2023 4,120.2 -0.3% 7.2% 3.4% 68.3%
2 .3 .1
5,689. 68,235 52,017
2024 4,337.4 1.5% 3.5% 3.3% 65.6%
6 .1 .6
5,920. 71,011 54,530
2025 4,546.5 2.2% 2.6% 3.2% 63.1%
6 .2 .9
6,143. 73,716 56,889
2026 4,740.7 1.8% 2.0% 3.0% 61.0%
0 .8 .6
 6,346. 76,204 59,140
2027 4,925.0 1.3% 2.0% 3.0% 59.7%
0 .6 .7

Companies[edit]
See also: List of companies of Germany and List of largest German companies
Of the world's 500 largest stock-market-listed companies measured by revenue in 2010,
the Fortune Global 500, 37 are headquartered in Germany. 30 Germany-based
companies are included in the DAX, the most popular German stock market index. Well-
known global brands are Mercedes-
Benz, BMW, SAP, Siemens, Volkswagen, Adidas, Audi, Allianz, Porsche, Bayer, BASF, 
Bosch, and Nivea.[72]
Germany is recognised for its specialised small and medium enterprises, known as the
Mittelstand model. SMEs account for more than 99 per cent of German companies.
[73]
 Around 1,000 of these companies are global market leaders in their segment and are
labelled hidden champions.[74]
From 1991 to 2010, 40,301 mergers and acquisitions with an involvement of German
firms with a total known value of 2,422 bil. EUR have been announced. [75] The largest
transactions[76] since 1991 are: the acquisition of Mannesmann by Vodafone for 204.8 bil.
EUR in 1999, the merger of Daimler-Benz with Chrysler to form DaimlerChrysler in 1998
valued at 36.3 bil. EUR.
Berlin (Economy of Berlin) developed an international Startup ecosystem and became a
leading location for venture capital funded firms in the European Union. [77]

Volkswagen headquarters in Wolfsburg

The list includes the largest German companies by revenue in 2011:

Revenu
Profit Employees
Rank [78]
Name Headquarters Ticker e
(Mil. €) (World)
(Mil. €)

Volkswagen
1. Wolfsburg VOWG 159,000 15,800 502,000
Group

2. E.ON Essen EONGn 113,000 −1,900 79,000

 Revenu
Profit Employees
Rank[78] Name Headquarters Ticker e
(Mil. €) (World)
(Mil. €)

3. Daimler Stuttgart DAIGn 107,000 6,000 271,000

4. Siemens Berlin, München SIEGn 74,000 6,300 360,000

Ludwigshafen am
5. BASF BASFn 73,000 6,600 111,000
Rhein

6. BMW München BMWG 69,000 4,900 100,000

7. Metro Düsseldorf MEOG 67,000 740 288,000

8. Schwarz Gruppe Neckarsulm 63,000 N/A 315,000

9. Deutsche Telekom Bonn DTEGn 59,000 670 235,000

10. Deutsche Post Bonn DPWGn 53,000 1,300 471,000

— Bosch Gerlingen 73,100 2,300 390,000

— Uniper Düsseldorf UNSE01 67,300 13,000

— Allianz München ALVG 104,000 2,800 141,000

— Deutsche Bank Frankfurt am Main DBKGn 2,160,000 4,300 101,000

Mergers and acquisitions[edit]

Since the German reunification, there have been 52,258 mergers or acquisitions deals
inbound or outbound in Germany. The most active year in terms of value was 1999 with
a cumulated value of 48. bil. EUR, twice as much as the runner up which was 2006 with
24. bil. EUR (see graphic "M&A in Germany").
Here is a list of the top 10 deals (ranked by value) that include a German company. The
Vodafone - Mannesmann deal is still the biggest deal in global history. [79]

Acquirer Target Value (in bil.

Rank Date Acquirer Target
Nation Nation USD)

14 Nov Vodafone United

1 Mannesmann AG Germany 202.79
1999 AirTouch PLC Kingdom

18 May United
2 Bayer AG Germany Monsanto Co 56.60
2016 States

6 May United
3 Daimler-Benz AG Germany Chrysler Corp 40.47
1998 States

16 Aug United
4 Linde AG Germany Praxair Inc 35.16
2016 States

21 Oct United
5 Mannesmann AG Germany Orange PLC 32.59
1999 Kingdom

24 Jul Deutsche Telekom VoiceStream Wireless United

6 Germany 29.40
2000 AG Corp States

17 May
7 Rhone-Poulenc SA France Hoechst AG Germany 21.92
1999

23 Mar
8 Bayer AG Germany Schering AG Germany 21.40
2006

01 Apr
9 Allianz AG Germany Dresdner Bank AG Germany 19.66
2001
 30 May Unicredito Italiano Bayerische Hypo- und
10 Italy Germany 18.26
2005 SpA Vereins

Economic region[edit]
Main article: Eurozone

Germany is part of a monetary union, the Eurozone (dark blue), and of the EU single market.

A proportional representation of Germany exports, 2019

Germany as a federation is a polycentric country and does not have a single economic
center. The stock exchange is located in Frankfurt am Main, the largest Media company
(Bertelsmann SE & Co. KGaA) is headquartered in Gütersloh; the largest car
manufacturers are in Wolfsburg (Volkswagen), Stuttgart (Mercedes-Benz and Porsche),
and Munich (Audi and BMW).[80]
Germany is an advocate of closer European economic and political integration. Its
commercial policies are increasingly determined by agreements among European
Union (EU) members and EU single market legislation. Germany introduced the
common European currency, the euro on 1 January 1999. Its monetary policy is set by
the European Central Bank in Frankfurt.
The southern states ("Bundesländer"), especially Bayern, Baden-Württemberg, and
Hessen, are economically stronger than the northern states. One of Germany's
traditionally strongest (and at the same time oldest) economic regions is the Ruhr
area in the west, between Duisburg and Dortmund. 27 of the country's 100 largest
companies are located there. In recent years, however, the area, whose economy is
based on natural resources and heavy industry, has seen a substantial rise in
unemployment (2010: 8.7%).[80]
The economy of Bayern and Baden-Württemberg, the states with the lowest number of
unemployed people (2018: 2.7%, 3.1%), on the other hand, is based on high-value
products. Important sectors are automobiles, electronics, aerospace, and biomedicine,
among others. Baden-Württemberg is an industrial center especially for the automobile
and machine-building industry and the home of brands like Mercedes-Benz (Daimler),
Porsche and Bosch.[80]
With the reunification on 3 October 1990, Germany began the major task of reconciling
the economic systems of the two former republics. Interventionist economic planning
ensured gradual development in eastern Germany up to the level of former West
Germany, but the standard of living and annual income remains significantly higher in
western German states.[81] The modernization and integration of the eastern German
economy continues to be a long-term process scheduled to last until the year 2019, with
annual transfers from west to east amounting to roughly $80 billion. The overall
unemployment rate has consistently fallen since 2005 and reached a 20-year low in
2012. The country in July 2014 began legislating to introduce a federally mandated
minimum wage which would come into effect on 1 January 2015. [82][needs update]
German states[edit]
Main article: List of German states by GRP

List of German states by GRP in 2019

GRP Share of
States Rank
(in billions EUR€) GDP (%)

 Germany — 3,435.760 100

 North Rhine-Westphalia 1 711.419 21.2

 Bavaria 2 632.897 18.2

 Baden-Württemberg 3 524.325 15.1

 Lower Saxony 4 307.036 8.8

 List of German states by GRP in 2019

GRP Share of
States Rank
(in billions EUR€) GDP (%)

 Hesse 5 294.477 8.6

 Berlin 6 153.291 4.3

 Rhineland-Palatinate 7 145.003 4.2

 Saxony 8 128.097 3.8

 Hamburg 9 123.270 3.6

 Schleswig-Holstein 10 97.962 2.9

 Brandenburg 11 74.330 2.1

 Thuringia 12 63.866 1.9

 Saxony-Anhalt 13 63.545 1.9

 Mecklenburg-Vorpommern 14 46.567 1.3

 Saarland 15 36.253 1.1

 Bremen 16 33.623 1.0

Wealth[edit]
Main article: List of Germans by net worth
Hasso Plattner

The following top 10 list of German billionaires is based on an annual assessment of

wealth and assets compiled and published by Forbes magazine on 1 March 2016.[83]

1. $27.9 billion Albrecht Family

2. $20.3 billion Theo Albrecht Jr.
3. $18.5 billion Susanne Klatten
4. $18.1 billion Georg Schaeffler
5. $16.4 billion Dieter Schwarz
6. $15.6 billion Stefan Quandt
7. $15.4 billion Michael Otto
8. $11.7 billion Heinz Hermann Thiele
9. $10 billion Klaus-Michael Kühne
10. $9.5 billion Hasso Plattner
Wolfsburg is the city in Germany with the country's highest per capita GDP, at
$128,000. The following top 10 list of German cities with the highest per capita GDP is
based on a study by the Cologne Institute for Economic Research on 31 July 2013.[84]

1. $128,000 Wolfsburg, Lower Saxony
2. $114,281 Frankfurt am Main, Hesse
3. $108,347 Schweinfurt, Bavaria
4. $104,000 Ingolstadt, Bavaria
5. $99,389 Regensburg, Bavaria
6. $92,525 Düsseldorf, North Rhine-Westphalia
7. $92,464 Ludwigshafen am Rhein, Rhineland-Palatinate
8. $91,630 Erlangen, Bavaria
9. $91,121 Stuttgart, Baden-Württemberg
10. $88,692 Ulm, Baden-Württemberg
Sectors[edit]

German exports in 2006

See also: Category:Industry in Germany

Germany has a social market economy characterised by a highly qualified labor force, a
developed infrastructure, a large capital stock, a low level of corruption,[85] and a high
level of innovation.[86] It has the largest national economy in Europe, the fourth largest by
nominal GDP in the world, and ranked fifth by GDP (PPP) in 2015.
The service sector contributes around 70% of the total GDP, industry 29.1%, and
agriculture 0.9%.[87]
Primary[edit]
In 2010 agriculture, forestry, and mining accounted for only 0.9% of Germany's gross
domestic product (GDP) and employed only 2.4% of the population, [66] down from 4% in
1991. Agriculture is extremely productive, and Germany can cover 90% of its nutritional
needs with domestic production. Germany is the third-largest agricultural producer in
the European Union after France and Italy. Germany's principal agricultural products are
potatoes, wheat, barley, sugar beets, fruit, and cabbages. [citation needed]
Despite the country's high level of industrialization, almost one-third of its territory is
covered by forest.[88] The forestry industry provides for about two-thirds of domestic
consumption of wood and wood products, so Germany is a net importer of these items.

Strip mining lignite at Tagebau Garzweiler near Grevenbroich, Germany

The German soil is relatively poor in raw materials. Only lignite (brown coal)

and potash salt (Kalisalz) are available in significant quantities. However, the former
GDR's Wismut mining company produced a total of 230,400 tonnes of uranium between
1947 and 1990 and made East Germany the fourth-largest producer of uranium ore
worldwide (largest in USSR's sphere of control) at the time. Oil, natural gas, and other
resources are, for the most part, imported from other countries. [89]
Potash salt is mined in the center of the country (Niedersachsen, Sachsen-
Anhalt and Thüringen). The most important producer is K+S (formerly Kali und Salz
AG).[89]
Germany's bituminous coal deposits were created more than 300 million years ago from
swamps which extended from the present-day South England, over the Ruhr
area to Poland. Lignite deposits developed similarly, but during a later period, about 66
million years ago. Because the wood is not yet completely transformed into coal, brown
coal contains less energy than bituminous coal.[89]
Lignite is extracted in the extreme western and eastern parts of the country, mainly
in Nordrhein-Westfalen, Sachsen and Brandenburg. Considerable amounts are burned
in coal plants near the mining areas, to produce electricity. Transporting lignite over far
distances is not economically feasible, therefore the plants are located practically next
to the extraction sites. Bituminous coal is mined in Nordrhein-Westfalen and Saarland.
Most power plants burning bituminous coal operate on imported material, therefore the
plants are located not only near to the mining sites, but throughout the country. [89]
In 2019, the country was the world's 3rd largest producer of selenium,[90] the world's 5th
largest producer of potash,[91] the world's 5th largest producer of boron,[92] the world's 7th
largest producer of lime,[93] the world's 13th largest producer of fluorspar,[94] the world's
14th largest producer of feldspar,[95] the world's 17th largest producer of graphite,[96] the
world's 18th largest producer of sulfur,[97] in addition to being the 4th largest world
producer of salt.[98]
Industry[edit]
See also: Mittelstand and Automotive industry in Germany

The world's largest coherent chemistry plant BASF in Ludwigshafen

Industry and construction accounted for 30.7% of the gross domestic product in 2017
and employed 24.2% of the workforce.[6] Germany excels in the production
of automobiles, machinery, electrical equipment and chemicals. With the manufacture of
5.2 million vehicles in 2009, Germany was the world's fourth-largest producer and
largest exporter of automobiles. German automotive companies enjoy an extremely
strong position in the so-called premium segment, with a combined world market share
of about 90%.
Small- to medium-sized manufacturing firms (Mittelstand companies) which specialize in
technologically advanced niche products and are often family-owned form a major part
of the German economy.[99] It is estimated that about 1500 German companies occupy a
top three position in their respective market segment worldwide. In about two thirds of
all industry sectors German companies belong to the top three competitors. [100]
Germany is the only country among the top five arms exporters that is not a permanent
member of the United Nations Security Council.[101]
Services[edit]
See also: Tourism in Germany

Bavaria (l.) is a tourism destination and Berlin (r.) a centre of creative industries, research and education.

In 2017 services constituted 68.6% of gross domestic product (GDP), and the sector
employed 74.3% of the workforce.[66] The subcomponents of services are financial,
renting, and business activities (30.5%); trade, hotels and restaurants, and transport
(18%); and other service activities (21.7%).
Germany is the seventh most visited country in the world, [102][103] with a total of 407 million
overnights during 2012.[104] This number includes 68.83 million nights by foreign visitors.
In 2012, over 30.4 million international tourists arrived in Germany. Berlin has become
the third most visited city destination in Europe.[105] Additionally, more than 30% of
Germans spend their holiday in their own country, with the biggest share going
to Mecklenburg-Vorpommern. Domestic and international travel and tourism combined
directly contribute over EUR43.2 billion to German GDP. Including indirect and induced
impacts, the industry contributes 4.5% of German GDP and supports 2 million jobs
(4.8% of total employment).[106] The largest annual international trade fairs and
congresses are held in several German cities such as Hannover, Frankfurt, and Berlin.
[107]

Government finances[edit]

German bonds
Inverted yield curve in 2008 and Negative interest rates 2014-2022
  30 year
  10 year
  2 year
  1 year
  3 month

Main articles: Taxation in Germany and Federal budget of Germany

The debt-to-GDP ratio of Germany had its peak in 2010 when it stood at 80.3% and
decreased since then.[108] According to Eurostat, the government gross debt of Germany
amounts to €2,152.0 billion or 71.9% of its GDP in 2015.[109] The federal government
achieved a budget surplus of €12.1 billion ($13.1 billion) in 2015. [110] Germany's credit
rating by credit rating agencies Standard & Poor's, Moody's and Fitch Ratings stands at
the highest possible rating AAA with a stable outlook in 2016.[111]
Germany's "debt clock" (Schuldenuhr) reversed for the first time in 20 years in January
2018. It is now currently increasing at 10,424.00 per second (Oct2020). [112]
Economists generally see Germany's current account surplus as undesirable. [113]

Infrastructure[edit]
Energy[edit]
Main article: Energy in Germany
Germany is the world's fifth-largest consumer of energy, and two-thirds of its primary
energy was imported in 2002. In the same year, Germany was Europe's largest
consumer of electricity, totaling 512.9 terawatt-hours. Government policy promotes
energy conservation and the development of renewable energy sources, such as
solar, wind, biomass, hydroelectric, and geothermal energy. As a result of energy-
saving measures, energy efficiency has been improving since the beginning of the
1970s. The government has set the goal of meeting half the country's energy demands
from renewable sources by 2050. Renewable energy also plays an increasing role in
the labor market: Almost 700,000 people are employed in the energy sector. About 50
percent of them work with renewable energies.[1]

The largest solar power and third-largest wind power capacity in the world is installed in Germany.

In 2000, the red-green coalition under Chancellor Schröder and the German nuclear
power industry agreed to phase out all nuclear power plants by 2021.
[114]
 The conservative coalition under Chancellor Merkel reversed this decision in January
2010, electing to keep plants open. The nuclear disaster of the Japanese nuclear
plant Fukushima in March 2011 however, changed the political climate fundamentally:
Older nuclear plants have been shut down. Germany is seeking to have wind, solar,
biogas, and other renewable energy sources play a bigger role, as the country looks to
completely phase out nuclear power by 2022 and coal-fired power plants by 2038.
[115]
 Renewable energy yet still plays a more modest role in energy consumption, though
German solar and wind power industries play a leading role worldwide.
In 2009, Germany's total energy consumption (not just electricity) came from the
following sources:[116] oil 34.6%, natural gas 21.7%, lignite 11.4%, bituminous coal
11.1%, nuclear power 11.0%, hydro and wind power 1.5%, others 9.0%.
In the first half of 2021, coal, natural gas and nuclear energy comprised 56% of the total
electricity fed into Germany's grid in the first half of 2021. Coal was the leader out of the
conventional energy sources, comprising over 27% of Germany's electricity. Wind
power's contribution to the electric grid was 22%.[115]
There are 3 major entry points for oil pipelines: in the northeast (the Druzhba pipeline,
coming from Gdańsk), west (coming from Rotterdam) and southeast (coming
from Nelahozeves). The oil pipelines of Germany do not constitute a proper network,
and sometimes only connect two different locations. Major oil refineries are located in or
near the following
cities: Schwedt, Spergau, Vohburg, Burghausen, Karlsruhe, Cologne, Gelsenkirchen, Li
ngen, Wilhelmshaven, Hamburg and Heide.[117]
Germany's network of natural gas pipelines, on the other hand, is dense and well-
connected. Imported pipeline gas comes mostly from Russia, the Netherlands and
the United Kingdom. Although gas imports from Russia have been historically reliable,
even during the cold war, recent price disputes between Gazprom and the former Soviet
states, such as Ukraine, have also affected Germany. As a result, high political
importance is placed on the construction of the Nord Stream 1 pipeline, running
from Vyborg in Russia along the Baltic sea to Greifswald in Germany. This direct
connection avoids third-party transit countries. [117] Germany imports 50% to 75% of
its natural gas from Russia.[118]
Transport[edit]
Main article: Transport in Germany
The ICE 3 trainset in Frankfurt

With its central position in Europe, Germany is an important transportation hub. This is
reflected in its dense and modern transportation networks. The extensive motorway
(Autobahn) network ranks worldwide third largest in its total length and features a lack
of blanket speed limits on the majority of routes.[119]
Germany has established a polycentric network of high-speed trains.
The InterCityExpress or ICE is the most advanced service category of the Deutsche
Bahn and serves major German cities as well as destinations in neighbouring countries.
The train maximum speed varies between 200 km/h and 320 km/h (125-200 mph).
Connections are offered at either 30-minute, hourly, or two-hourly intervals. [120] German
railways are heavily subsidised, receiving €17.0 billion in 2014. [121]
The largest German airports are Frankfurt Airport and Munich Airport, both are global
hubs of Lufthansa. Other major airports are Berlin Brandenburg
Airport, Düsseldorf, Hamburg, Hanover, Cologne/Bonn, and Stuttgart.

Technology[edit]
Main article: List of German inventors and discoverers

Liquid crystal visualized by a polarizing microscope. Germany is a pioneer research center

for nanotechnology and materials engineering.[122]

Germany's achievements in sciences have been significant, and research and

development efforts form an integral part of the economy.[123]
Germany is also one of the leading countries in developing and using green
technologies. Companies specializing in green technology have an estimated turnover
of €200 billion. German expertise in engineering, science, and research is eminently
respectable.
The lead markets of Germany's green technology industry are power generation,
sustainable mobility, material efficiency, energy efficiency, waste management
and recycling, sustainable water management.[124]
Regarding triadic patents, Germany is in third place after the US and Japan. With more
than 26,500 registrations for patents submitted to the European Patent Office, Germany
is the leading European nation. Siemens, Bosch and BASF, with almost 5,000
registrations for patents between them in 2008, are among the Top 5 of more than
 35,000 companies registering patents. Together with the US and Japan, about patents
for nano, bio, and new technologies Germany is one of the world's most active nations.
With around one-third of triadic patents Germany leads the way worldwide in the field of
vehicle emission reduction.[125]
According to Winfried Kretschmann, who is premier of the region where Daimler is
based, "China dominates the production of solar cells? Tesla is ahead in electric cars
and Germany has lost the first round of digitalization to Google, Apple, and the like.
Whether Germany has a future as an industrial economy will depend on whether we
can manage the ecological and digital transformation of our economy". [126]

Challenges[edit]
Despite economic prosperity, Germany's biggest threat to future economic development
is the nation's declining birthrate which is among the lowest in the world. This is
particularly prevalent in parts of society with higher education. As a result, the numbers
of workers are expected to decrease and the government spending needed to support
pensioners and healthcare will increase if the trend is not reversed. [127]
Less than a quarter of German people expect living conditions to improve in the coming
decades.[128]
On August 25, 2020, Federal Statistical Office of Germany revealed that the German
economy plunged by 9.7% in the second quarter which is the worst on record. The
latest figures show how hard the German economy was hit by the COVID-19 pandemic.
[129]

Energy-intensive German industry and German exporters were hit particularly hard by

the 2022 global energy crisis.[130][131] Economy Minister Robert Habeck warned that the
planned end of Russian energy imports will permanently raise energy prices for German
industry and consumers.[132]

See also[edit]
 Germany portal

 European Union portal

 Business portal

 Association of German Chambers of Industry and Commerce

 Codetermination in Germany
 Deutsche Bundesbank
 German Federal Association of Young Entrepreneurs
 German model
 Metropolitan regions in Germany
 List of German states by unemployment rate
 List of German cities by GDP
 Trade unions in Germany