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Germany Economy

    Economy—overview: Germany possesses the world's third most powerful economy, with its capitalist market system tempered by generous welfare benefits. On 1 January 1999, Germany and 10 other European Union countries launched the European Monetary Union (EMU) by permanently fixing their bilateral exchange rates and giving the new European Central Bank control over the zone's monetary policy. Germans expect to have the new European currency, the euro, in pocket by 2002. Domestic demand contributed to a moderate economic upswing in early 1998, although unemployment remains high. Job-creation measures have helped superficially, but structural rigidities—like high wages and costly benefits—make unemployment a long-term, not just a cyclical, problem. Although minimally affected by the Asian crisis in 1998, Germany revised its 1999 forecast downward at the beginning of the year to reflect anticipated effects from the global economic slowdown. Over the long term, Germany faces budgetary problems—lower tax revenues and higher pension outlays—as its population ages. Meanwhile, the German nation continues to wrestle with the integration of eastern Germany, whose adjustment may take decades to complete despite annual transfers from the west of roughly $100 billion a year.

    GDP: purchasing power parity—$1.813 trillion (1998 est.)

    GDP—real growth rate: 2.7% (1998 est.)

    GDP—per capita: purchasing power parity—$22,100 (1998 est.)

    GDP—composition by sector:
    agriculture: 1.1%
    industry: 33.1%
    services: 65.8% (1998)

    Population below poverty line: NA%

    Inflation rate (consumer prices): 0.9% (1998 est.)

    Labor force: 38.2 million (1998)

    Labor force—by occupation: industry 33.7%, agriculture 2.7%, services 63.6% (1998)

    Unemployment rate: 10.6% (1998 est.)

    Budget:
    revenues: $977 billion
    expenditures: $1.024 trillion, including capital expenditures of $NA (1998 est.)

    Industries: western: among world's largest and technologically advanced producers of iron, steel, coal, cement, chemicals, machinery, vehicles, machine tools, electronics, food and beverages; eastern: metal fabrication, chemicals, brown coal, shipbuilding, machine building, food and beverages, textiles, petroleum refining

    Industrial production growth rate: 5% (1998)

    Electricity—production: 515.058 billion kWh (1996)

    Electricity—production by source:
    fossil fuel: 66.23%
    hydro: 3.5%
    nuclear: 29.81%
    other: 0.46% (1996)

    Electricity—consumption: 509.458 billion kWh (1996)

    Electricity—exports: 42.5 billion kWh (1996)

    Electricity—imports: 36.9 billion kWh (1996)

    Agriculture—products: western—potatoes, wheat, barley, sugar beets, fruit, cabbages; cattle, pigs, poultry; eastern—wheat, rye, barley, potatoes, sugar beets, fruit; pork, beef, chickens, milk, hides

    Exports: $510 billion (f.o.b., 1998 est.)

    Exports—commodities: machinery 31%, vehicles 17%, chemicals 13%, metals and manufactures, foodstuffs, textiles (1997)

    Exports—partners: EU 55.5% (France 10.7%, UK 8.5%, Italy 7.4%, Netherlands 7.0%, Belgium-Luxembourg 5.8%), US 8.6%, Japan 2.3% (1997 est.)

    Imports: $426 billion (f.o.b., 1998 est.)

    Imports—commodities: machinery 22%, vehicles 10%, chemicals 9%, foodstuffs 8%, textiles, metals (1997)

    Imports—partners: EU 54.3% (France 10.5%, Netherlands 8.5%, Italy 7.8%, UK 7.0%, Belgium-Luxembourg 6.2%), US 7.7%, Japan 4.9% (1997)

    Debt—external: $NA

    Economic aid—donor: ODA, $7.5 billion (1995)

    Currency: 1 deutsche mark (DM) = 100 pfennige

    Exchange rates: deutsche marks (DM) per US$1—1.69 (January 1999), 1.7597 (1998), 1.7341 (1997), 1.5048 (1996), 1.4331 (1995), 1.6228 (1994)
    note: on 1 January 1999, the European Union introduced a common currency that is now being used by financial institutions in some member countries at the rate of 0.8597 euros per US$ and a fixed rate of 1.95583 deutsche marks per euro; the euro will replace the local currency in consenting countries for all transactions in 2002

    Fiscal year: calendar year

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)