Germany Economic Forecast

By: EconomyWatch Content Team   Date: 13 June 2010

About The Author

EconomyWatch Content Team

The Economy Watch Content Team manages our thousands of reference pages on economic, industry,

EconomyWatch, Content Team

 

  • Dot Div
  •      

Germany is the fifth largest economy in the world with a GDP (PPP) of US$2.94 trillion in 2010. It is also the largest economy in Europe. Germany's economy is driven by its exports, making it the world's second largest exporter with a total export value of US$1.33 trillion in 2010. However, with a lack of natural resources, Germany imports most of its energy resources, mostly oil and natural gas, for its energy needs.

When a number of countries in the eurozone fall into debt crisis in the late 2009, Germany, being the largest economy in the eurozone, along with other major economies in the eurozone rendered relief support with stimulus packages of trillion of dollars as bailout loans for other eurozone countries, notably Greece, Ireland and Portugal.

The financial support for debt-ridden eurozone countries put significant demands on the country's federal budget. In addition, the Germany government plans to undercut the budget in 2011 as a mean of balancing it. Other long term challenges for the Germany economy includes low fertility rate, declining net immigration, increasing press on social welfare system and high unemployment rate.

Germany's GDP Forecast

Germany was the fifth largest economy in the world for 2010, according to GDP (PPP) and fourth in the world according to GDP (Current Prices, US Dollars). Germany's GDP (PPP) was US$2.94 trillion and its GDP (Current Prices, US Dollars) was US$3.31 trillion.

Germany's economy is expected to grow by 3.66 percent in 2011, posting a GDP (PPP) of US$3.048 trillion. The economy will experience a slow but steady growth of average 3.1 percent over the next 5 years, to hit US$3.577 trillion in 2016.

Germany is expected to see similar growth in its GDP (PPP) per capita over the next 5 years. In 2010, Germany had the 20th highest GDP (PPP) per capita in the world at US$36,033. In 2011, Germany's GDP (PPP) per capita will grow by 3.87 percent to US$37,428. From 2012 to 2016, its GDP (PPP) per capita will grow by 3.33 to 3.48 percent. By 2016, Germany's GDP (PPP) will be US$44,364, the 19th highest GDP (PPP) per capita in the world.

Germany's Unemployment Forecast

Germany's unemployment rate stood at 6.858 percent in 2010, the lowest rate in two decades. After the global financial crisis in 2008, the country experience high unemployment rate of 7.49 percent in 2009. The drop in unemployment rate is brought about by strong exports of autos and other products, which drive the economy growth after the 2008 crisis.

Germany's unemployment is expected to drop further by 4.37 percent to 6.558 percent in 2011. From 2012 to 2014, the unemployment rate will fall by 1 to 2.6 percent  to 6.309 percent. The rate will be kept at 6.309 percent till 2016.

Despite the fall in Germany's unemployment rate, the eurozone is experiencing an average unemployment rate of 9.9 percent, with countries like Ireland and Spain having jobless rates twice as high of Germany. It's drop in unemployment signifies the divergence between Germany's booming economy among the slow growth in the rest of Europe.

Germany's Inflation Rate & Current Account Balance Forecast

Germany's inflation rate (Average Consumer Price Change %) is one of the lowest among the Eurozone countries, with a rate of 1.15 percent in 2010. However, this figure is a significant jump of 391.45 percent from the 2009 inflation rate of 0.234 percent.

The inflation rate is expected to increase to 2.186 percent in 2011, which is slightly higher than European Central Bank's goal of 2 percent rate. Experts says the rapid increase in inflation rate and rising energy and commodity prices may force the ECB to raise its interest rate to prevent depreciation of the currency.

After the rise of inflation to over 2 percent in 2011, the rate is expected to drop to by 30.1 percent to 1.527 percent rate in 2012, and will rise gradually to 2 percent by 2015, and remain the same to 2016.

Germany has a current account surplus of US$176.08 billion in 2010, and this makes them them the 3rd highest current account surplus in the world, behind Japan's current account surplus of US$194.75 billion.

Germany's current account surplus is expected to increase by 2.65 percent to US$180.76 billion in 2011. However, a fall in value of  exports will cause the current surplus will see a decline from 2011 onwards, dropping by 8.88 percent to US$164.1 billion and falling between 2.4 to 7.3 percent to reach US$142.22 billion by 2016. 

 


  • Dot Div
  •      

Most Popular in Germany Economy

Related Links
blog comments powered by Disqus