Germany economic overview
The heart of the European Union:
Germany is the EU's largest and most populous economy and the fourth-largest globally by nominal GDP. It plays a key role on the EU stage, with Berlin often having a deciding sway over policy changes in the bloc. Germany was a founding member of the Euro area and has adopted the euro as its currency since the currency union's creation in the early 2000s.
Manufacturing powerhouse:
Germany is renowned for its industrial strength, particularly in the automotive, machinery, and chemical sectors. It also boasts a strong service sector, with a significant focus on financial services, IT, and tourism. The German economy is characterized by its high-quality engineering and skilled labor force.
Export hub:
Germany is the world's third-largest exporter and the largest exporter in the EU, with exports roughly double those of France in 2022. The country is a leading exporter of machinery, vehicles, chemicals, and household equipment, making it highly dependent on global trade dynamics. Recent years have seen a shift towards more environmentally-friendly production processes and digital technologies in manufacturing.
Contrasting economic fortunes:
Surging exports while globalization was at its peak in the mid-2010s drove healthy economic growth in 2014-17. However, rising trade tensions, supply restraints and weak global goods demand in the wake of the pandemic have hurt the economy in more recent years.
Challenges:
The German economy faces several challenges, including an aging population, the need for digital transformation, and transitioning to more sustainable and environmentally friendly production methods. In particular, the shift to electric vehicles poses risks to the car industry. Moreover, the export-led growth model has been called into question in an era of rising trade tensions.
Germany's economic outlook:
Economic growth is expected to undershoot the Euro area average in the coming years due to a comparatively poor demographic outlook, a reliance on external demand and the country's reliance on legacy industries such as combustion engine vehicle production. More positively, inflation will be mild and public debt is set to remain the lowest in the G7 by some distance.
Germany's economy in numbers:
Nominal GDP of USD 4,068 billion in 2022.
GDP per capita of USD 48,545 compared to the global average of USD 10,589.
Average real GDP growth of 1.2% over the last decade.
Share of the region's population
Share of the region's GDP
Economic structure:
In 2021, services accounted for 73% of overall GDP, manufacturing 18%, other industrial activity 8%, and agriculture 1%. Looking at GDP by expenditure, private consumption accounted for 49% of GDP in 2021, government consumption 22%, fixed investment 23%, and net exports 6%.
GDP by economic sector
GDP by type of expenditure
International trade:
In 2021, manufactured products made up 84% of total merchandise exports, mineral fuels 3%, food 5%, ores and metals 3% and agricultural raw materials 1%, with other categories accounting for 4% of the total. In the same period, manufactured products made up 72% of total merchandise imports, mineral fuels 9%, food 8%, ores and metals 5% and agricultural raw materials 1%, with other goods accounting for 5% of the total. Total exports were worth USD 1,640 billion in 2022, while total imports were USD 1,517 billion.
Key exports
Key imports
Key export partners
Key import partners
Economic growth:
The economy recorded average annual growth of 1.2% in the decade to 2022. To read more about GDP growth in Germany, go to our dedicated page.
Fiscal policy:
Germany's fiscal deficit averaged 0.3% of GDP in the decade to 2022. Find out more on our dedicated page.
Unemployment:
The unemployment rate averaged 6.0% in the decade to 2022. For more information on Germany's unemployment click here.
Inflation:
Inflation averaged 2.1% in the decade to 2022. Go to our Germany inflation page for extra insight.
Monetary Policy:
Euro Area monetary policy rate ended 2022 at 2.50%, up from 0.75% a decade earlier. See our Germany monetary policy page for additional details.
Exchange Rate:
From end-2012 to end-2022 the euro weakened by 18.2% vs the U.S. dollar. For more info on the euro, click here.
A second national accounts release confirmed that the economy rebounded 0.2% in seasonally adjusted quarterly terms in Q1 (Q4 2023: -0.5% s.a. qoq), the strongest result in a year and beating market expectations. The upturn chiefly reflected rebounding fixed investment—in particular in the construction sector—and goods exports. That said, private and public spending both swung into contraction, limiting the recovery. Turning to the second quarter, our Consensus is for a timid sequential expansion. Exports should be benefiting from a recovery in the wider EU economy, while robust wage growth should be supporting domestic demand. That said, available data calls for caution: Inflation ticked up and economic sentiment remained pessimistic in April, while manufacturing-sector conditions deteriorated in April–May. More positively, the services PMI posted a near one-year high in May.
Projections out to 2033.
62 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 56 expert analysts.
Want to get insight on the economic outlook for Germany in the coming years? FocusEconomics collects projections out to 2033 on 62 economic indicators for Germany from a panel of 56 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts'projections with timely written analysis from our in-house team of economists on the latest developments in the Germany economy.To download a sample report on the Germany's economy, click here . To get in touch with our team for more information, fill in the form at the bottom of this page .
