Second to Germany, France is the second largest exporter and importer in Europe. Since January 1 1995, France has been a part of the World Trade Organisation, existing both as an individual nation and as part of the EU (known officially as the European Communities in the WTO until 30 November 2009).

Second to Germany, France is the second largest exporter and importer in Europe. Since January 1 1995, France has been a part of the World Trade Organisation, existing both as an individual nation and as part of the EU (known officially as the European Communities in the WTO until 30 November 2009).

Much of France’s exports include a number of valuable commodities including machinery and transportation equipment, aircraft, plastics, chemicals, pharmaceuticals, iron, steel, consumer products, petroleum and cars & vehicles. A major part of this foreign trade is carried out with European partners including Germany, UK, Spain and Italy. Exports to the EU increased slightly due to rising deliveries to Germany and Italy.

Outside the EU, sales to Africa and Asia continued to increase, but exports to the Middle East, America, Switzerland and Turkey fell. France is also the world’s largest exporter in the world of both services and farm products.

The manufacturing industry is a key exporter, making up nearly 27% of France’s GDP. France’s exceptional export growth has been aided by structural reforms initiated by the government that promote every aspect of foreign trade.

France is also the ninth-largest trading partner of the U.S.

In June 2013, France’s trade deficit narrowed to €4.44 billion. The deficit decline was due to a sharp fall in imports which registered the weakest reading since December 2010.

France’s Import and Export Indicators and Statistics at a Glance (2012)

Total value of exports: $567.1 billion

Primary exports – commodities: machinery and transportation equipment, aircraft, plastics, chemicals, pharmaceutical products, iron and steel, beverages

Primary exports partners: Germany (16.7 percent of total exports), Belgium (7.5 percent), Italy (7.5 percent), Spain (6.9 percent), UK (6.9 percent), US (5.6 percent), Netherlands (4.3 percent)

Total value of imports: $641.3 billion

Primary imports – commodities: machinery and equipment, vehicles, crude oil, aircraft, plastics, chemicals

Primary imports partners: Germany (19.5 percent), Belgium (11.3 percent), Italy (7.6 percent), Netherlands (7.4 percent), Spain (6.6 percent), UK (5.1 percent), China (4.9 percent)

The post France Trade, Exports and Imports appeared first on Economy Watch.

The Indian economy is incredibly diverse – made up of traditional industries such as village farming, fishing, and handicrafts, as well as modern sectors such as telecommunications, transportation, and tourism.

The Indian economy is incredibly diverse – made up of traditional industries such as village farming, fishing, and handicrafts, as well as modern sectors such as telecommunications, transportation, and tourism.

Much of the economy though is built on informal businesses. The informal economy was recently estimated as comprising 60 percent of net domestic product, 68 percent of income, 60 percent of savings, 31 percent of agricultural exports and 41 percent of manufactured exports. Similarly, within the retail industry, 90 percent of the market is controlled by small-scale, family-run operations with big chains making up just 10 percent.

In the long run, the Indian economy will be driven by the service sector, private enterprises and domestic demand. A glance at India’s 500 most valuable companies, that together account for over 90 percent of the market capitalisation of the Bombay Stock Exchange, shows that about two-thirds of them are part of large family-owned conglomerates, or “business groups”. These conglomerates have the ability to expand India’s international presence, yet have seen an over-concentration of power – sparking cronyism, corruption, and easy money.

Meanwhile, unlike most developing countries, where economic growth has seen the economy shift from agriculture to industries before gradually expanding the service sector, in India, the economic shift has bypassed industries growth to immediately begin rapid expansion of the services sector instead.

India Industry Sectors

In 2012, the services sector accounted for 62.6 percent of India’s total GDP. The rapid growth of the services sector in India over the last two decades has been linked to the liberalisation and reforms of the 1990s.

In the first three decades (1950s to 1970s) after India’s independence in 1947, India was largely an agrarian economy – with a small services sector (29.8 percent of GDP in the 1950s) made up mainly of government monopolies. Although the service sector started to grow in the mid-1980s, it accelerated only in the 1990s when India initiated a series of economic reforms after the country faced a severe balance of payment crisis. Among the reforms in the services sector, as part of an overall reform process, was the removal of FDI restrictions and streamlining of approval procedures, leading to greater privatization.

Today, services is the fastest growing sector in India, contributing significantly to GDP, GDP growth, employment, trade and investment. Even during the global economic slowdown from 2008 to 2009, the services sector remained resilient to external shocks. In 2009-10, the services sector grew at 9.96 percent compared to 8.81 percent growth in industries and 1.57 percent in agriculture. India’s services trade also reached $240 billion in 2010, compared to just $6 billion in the 1980s.

From 2000-2010, transport, storage and communication services were the fastest growing services sub-sector, followed by financing and business services. IT enabled services, such as Business Process Outsourcing, have also grown rapidly in the recent years and will continue to rise.

Unfortunately, services sector employment in India is still low compared to its share in GDP. Just 28 percent of India’s labour force were employed in services in 2012. Within the organised services sector, the public sector dominates the employment in services, while the private sector has not been very successful in creating organised services sector employment.

The Indian government though hopes that growth in tourism and tourism-related services, such as hotels, will hold large potential for job creation, while India’s large English-speaking skilled work force can make the nation a major exporter of software services and skilled manpower.

On the other hand, more than 53 percent of India’s population still depend on agriculture for employment. However, agriculture contributes only 17 percent to India’s GDP.

According to Economist statistics, India is the world’s second largest agricultural producer behind China. In 2010, India’s agricultural output was $304 billion. India also ranked within the world’s five largest producers for over 80 percent of agricultural produce items, including many cash crops such as coffee and cotton.

The country is the 6^th largest producer of Meat (including Livestock and fisheries), the 2^nd largest producer of fruits and vegetables, the largest producer and consumer of tea, and also the largest consumer of tea in the world (accounting for more than 15 percent of the global tea trade), the 2^nd largest producer and consumer of rice and the largest producer of sugar.

However, poor infrastructure and unorganised retail cause India to experience some of the highest food losses in the world. Public investment in agriculture needs to be augmented, especially in rural infrastructure, irrigation and agricultural research and development – and better access to institutional credit for farmers should also be of high priority to the government to encourage growth in India’s agricultural sector. According to the FAO, crop yields in India are still just 30-60 percent of the best sustainable crop yields achievable in the farms of developed as well as other developing countries.

Finally, the Industry sector makes up 18 percent of India’s GDP and employs 19 percent of the labour force. Among the major sub-industries include textiles (the largest industry in terms of employment), chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software and pharmaceuticals.

Read more about India’s economy, including industry information, featured analysis and trade statistics below.

The post India Industry Sectors appeared first on Economy Watch.

After nearly a decade of rapid GDP growth, peaking at 11.228 percent in 2010, India’s economy has slowed significantly – plagued by stalled reforms, huge corruption scandals and bureaucratic inaction. In 2012, India’s GDP growth rate (constant prices, national currency) was just 3.986 percent, below the 5.5 percent estimate earlier in the year as well as a revised 4.9 percent target forecasted in October 2012.

After nearly a decade of rapid GDP growth, peaking at 11.228 percent in 2010, India’s economy has slowed significantly – plagued by stalled reforms, huge corruption scandals and bureaucratic inaction. In 2012, India’s GDP growth rate (constant prices, national currency) was just 3.986 percent, below the 5.5 percent estimate earlier in the year as well as a revised 4.9 percent target forecasted in October 2012.

The IMF in April also lowered its forecast for India’s economic growth in 2013 to 5.676 percent from its January estimate of 5.9 percent. On the bright side, the IMF did say that India’s economic slowdown appears to have bottomed out. It expects the government’s recent reform measures (including reducing fuel subsidies, easing foreign investment restrictions in retail and civil aviation, and setting up a ministerial panel to fast-track industrial projects), improving external demand and a better monsoon season to boost economic activity. This is reflected in the IMF’s growth forecasts, predicting that GDP growth rates will gradually pick up over the next five years from 6.23 percent in 2014 to 6.965 percent in 2018.

Nevertheless, the Indian economy still lacks momentum in infrastructure and industrial development, necessary to revive investors’ confidence to boost growth. Furthermore, despite the fact that the rupee has depreciated by nearly 25 percent, India’s current account deficit is growing, and inflation remains persistently high.

Indian Prime Minister Manmohan Singh has claimed that the country’s economic slowdown is cyclical and temporary and that pessimism is unwarranted. But the IMF has warned policymakers not to attribute too much of the recent economic downturn to cyclical rather than structural factors.

“The issue is broader and most obvious in economies where supply factors, such as infrastructure or labour-market bottlenecks, and domestic policy factors, such as policy uncertainty and regulatory obstacles, have contributed to the recent stalling of investment,” it said.

India’s GDP Forecast

India is the 10th largest economy in the world according to GDP (current prices, US dollars) and the 4th largest by GDP (PPP). In 2012, India’s GDP (current prices) was $1.824 trillion and its GDP (PPP) was $4.684 trillion.

In 2013, India’s GDP (PPP) is expected to grow to $5.032 trillion. This will allow it to overtake Japan as the 3^rd largest economy in the world by GDP (PPP), but its nominal GDP will only see a slight increase to $1.973 trillion.

Nevertheless, with the economic slowdown expected to bottom out soon, India’s growth is expected to pick up, allowing the nation to become the 9^th largest economy in the world by 2018, in terms of GDP (current prices, US dollars). In that year, India’s GDP (current prices, US dollars) is forecasted to be $2.976 trillion and its GDP (PPP) will be $7.718 trillion.

Similarly, slow progress is expected to be made for India’s GDP (PPP) per capita. In 2012, Indians were the 131^st richest people in the world with a GDP (PPP) per capita of $3,829.70. In 2013, the figure will climb by 6.02 percent to $4,060.22 – 130^th in the world – and by 2018, India’s GDP (PPP) per capita is forecasted to reach $5,833.59 – 129^th spot. In comparison, the expected average GDP (PPP) per capita for emerging and developing countries in 2018 is $10,291.63.

India’s Unemployment Forecast

Unemployment figures for India are notoriously unreliable given the difficulty in collecting data, the vast informal economy and the weak definition by the government towards the statistic. From 1983 until 2011, India’s unemployment rate, according to government surveys, averaged 7.6 percent – reaching an all time high of 9.4 percent in 2009 and a record low of 3.8 Percent in 2011.

Analysts say these figures are grossly understated, as most of the surveys do not reveal the rising “underemployment” – those who have given up looking for work or are part-timers seeking full-time posts – in the country. Additionally, the nature of the informal sector greatly distorts the unemployment figure. Reported self-employment accounts for more than 60 percent of the officially employed population of India. Casual workers, who get jobs only at times and remain unpaid when they don’t have work, constitute 30 percent of the workforce, while only 10 percent are regular employees.

Nonetheless, there are other indicators pointing to a worsening unemployment situation in India. For instance, given India’s high population growth rate, about 10 to 12 million jobs should be created each year to maintain employment/unemployment rates. But between 2005 and 2010, fewer than 3 million new jobs were added to the economy. This suggests that unemployment figures should be rising rapidly, unless millions of Indians are giving up on looking for a job each year.

India’s Inflation Rate & Current Account Balance Forecast

Following the 2008 global financial crisis, inflation rates (average consumer price change) in India rose quickly from 6.372 percent in 2007 to 10.882 percent in 2009. Inflation peaked at 11.989 percent in 2010, though the figure has since dropped to 9.312 percent in 2012.

However, inflation (average consumer price change) is expected to climb again to 10.816 percent in 2013, due to several fiscal reforms. The government last September removed some fuel subsidies for its citizens to improve its weak financial health, while weak consumer demand is also starting to feed into inflation. On the other hand, lower commodity prices and weak industrial activity may ease India’s inflation figure.

India’s inflation is expected to be moderate-high over the next five years after. In 2014, inflation (average consumer price change) is expected to drop slightly to 10.71 percent, before seeing bigger drops from 2015 to 2018. By 2018, inflation is expected to be at 6.677 percent.

Meanwhile, India’s current account deficit has grown worryingly high. In 2012, India had the second highest current account deficit in the world at $93.304 billion – an increase from just $62.756 billion a year before. The rapid increase has been down mainly to a surge in demand for oil and gold, though exports have weakened during the period as well.

Although the government has pledged to reduce the deficit “over time” and ensure that it is “financed safely . . . though sufficient foreign inflows,” India risks a sudden stop or reversal of capital flows, jeopardising their macro-financial stability. The current account deficit is expected to increase even further over the next five years to $97.617 billion in 2013 – and $100.858 billion in 2018.

Read more about India’s economy, including industry information, featured analysis and trade statistics below.

The post India Economic Forecast appeared first on Economy Watch.

The United Kingdom is made up of England, Scotland, Wales, and Northern Ireland. It has the fifth largest national economy—measured by nominal GDP—in the world, and the second largest in Europe. In 2013, the United Kingdom (UK) was the world’s fourth largest exporter and importer. Many economists rank the UK as one of the most globalized economies. London has the largest city GDP in Europe.

The United Kingdom is made up of England, Scotland, Wales, and Northern Ireland. It has the fifth largest national economy—measured by nominal GDP—in the world, and the second largest in Europe. In 2013, the United Kingdom (UK) was the world’s fourth largest exporter and importer. Many economists rank the UK as one of the most globalized economies. London has the largest city GDP in Europe.

Service sector business dominates the UK economy, making up about 78 percent of GDP. Financial services are particularly important, with London tying New York for largest financial center. Aerospace industry, pharmaceuticals, automotive industry, and North Sea oil and gas production make up the greatest portion of the remainder of the UK’s GDP.

The UK’s central bank is known as the Bank of England; its Monetary Policy Committee sets national interest rates. The national currency of the UK is the pound sterling (₤). The pound is the world’s third largest reserve currency, following only the US dollar and the EU euro. It is also the fourth most valuable currency in the world, after the Kuwaiti dinar, Bahraini dinar, and Omani rial.

The United Kingdom is a member of the G7, the G8, the G20, the Commonwealth of Nations, the European Union, the International Monetary Fund (IMF), the Organization for Economic Co-operation and Development (OECD), the World Bank, the World Trade Organization (WTO), the Asian Infrastructure Investment Bank, and the United Nations (UN).

Economic History

England emerged from Roman rule as a culturally diverse island made up of multiple kingdoms. The economy was largely agrarian and based on a well-developed feudal system. Eventually conquered by the Norman French in 1066, England hosted a largely homogenized culture, and it turned its interests to subjugating the Welsh, Irish, and Scottish, and continuing conflicts over the throne of France. This area managed to remain largely self-sufficient through most of its history.

At the dawn of the industrial age, the UK was the first country to industrialize. Britain led the industrial revolution, dominating the European and world economy during most of the 19th century. UK industry led to innovations such as steam engines, textile equipment, and more modern tools. It also invented the railroad system, and built much of the railway equipment used by other nations. The UK also dominated banking, with London as the heart of global finance.

Colonization allowed the island nation to build one of the most impressive empires in history. Throughout much of the colonial period, the UK followed a mercantile system of economic control. However, after 1840 it abandoned mercantilism and in favor of free trade, with no tariffs, quotas, or restrictions. The empire period also saw the development of one of the most powerful navies and armies in the world. These forces protected global holdings and trade routes.

However, starting in the late 19th century, growth by other nations—the United States and Germany, in particular—began to outpace Britain and cut into her export and economic expansion rates. The costs of fighting two World Wars further weakened the UK’s relative position in the global economy. Although it remains a significant player in the world economy, particularly in financial services and knowledge economy, it is no longer the empire it once was. Nevertheless, between 1870 and 2000, per capita economic output in the UK increased by 500 percent, leading to a remarkable improvement in living standards and one of the highest qualities of life in the world today.

Current Economic Situation

The UK entered a recession during the global financial crisis of 2008. The UK had not experienced a significant downturn in its economy for nearly two decades before, and its initial losses in the recession were deeper than any other G7 member nation save Japan. It exited the recession in the fourth quarter of 2009, according to the Office for National Statistics (ONS). However, the ONS also reported that total negative growth caused a 7.2 percent contraction in the UK’s economy, making it the longest and deepest recorded recession in UK history.

The Labour government lost support during the financial crisis, and the general election of May 2010 ended in a hung parliament. The conservatives took control of the government. While the Labour party followed a deficit spending policy, the Tory government immediately began making deep spending cuts. This resulted in six figure public sector job losses but strong private sector growth. By October 2013, unemployment fell below two and a half million for the first time since the beginning of the crisis.

The Office for National Statistics reported that between 2005 and 2011 the UK dropped from fifth largest average household income in the world to 12th. This drop was partially attributed to the devaluation of sterling, which backs the pound. However, the ONS also reported that during this same period inflation was relatively flat, the labor market remained more resilient than in other recessions, and household spending and wealth in the UK remained relatively strong in comparison with other OECD member countries.

Nevertheless, since 2013, the UK has pursued a strong policy of recovery and expansion. An austerity program dating back to 2010 continues, with the aim of further deficit reductions. While deficit spending accounted for 11 percent of GDP in 2009 and 2010, but as of 2014 had fallen to five percent.

The ONS estimates that growth in first quarter of 2015 was 0.3 percent, and that the volume of the GDP is four percent above pre-recession peak figures.

Economic Forecast

According to the OECD, economic growth in the UK is the result of exemplary job creation: a trend that should continue throughout 2015 and 2016. Growth was further underpinned by robust private consumption and investment. However, the OECD also predicts inflation to gradually increase, beginning in 2015. If this occurs, it will likely lead to a shift in government economic programs in order to counteract the negative effects of inflation. Higher interest rates could support stronger growth in productivity.

Reforms to loan availability may also occur in the short to medium term, further bolstering consumer spending and corporate capital investment. This could free up additional funds to address the UK’s aging infrastructure, in order to further support industry.

The post United Kingdom Economy appeared first on Economy Watch.

The UK is the 7^th leading importer and the 12^th leading exporter in the world. Accordingly, the UK holds a massive trade deficit with the rest of the world, second only to the US. In 2012, UK imports were worth $646 billion with exports valued at only $481 billion.

The UK is the 7^th leading importer and the 12^th leading exporter in the world. Accordingly, the UK holds a massive trade deficit with the rest of the world, second only to the US. In 2012, UK imports were worth $646 billion with exports valued at only $481 billion.

In recent years, the UK has run the largest trade deficits with Norway, Germany, China, Hong Kong and Netherlands. This is mainly due to increase in demand of consumer goods, a drop in UK manufacturing and a decline in local oil and gas production. Over the past 12 months, the deficit has been flat, damping hopes that rising demand for UK goods and services will spur an economic recovery.

Since 2010, Britain began trying to rebalance its economy more towards exports and away from a reliance on domestic consumption after the financial crisis. But progress has been slow, despite a roughly 20 percent fall in the value of sterling since 2008.

Economists have warned of a possible balance of payments crisis unless the UK can reduce its persistent over-spending. Without an adjustment that either reduces imports or pushes up exports, investors may become wary of putting their funds in the UK.

The latest trade figures from April 2013 however show that the trade deficit is narrowing on a month-on-month basis. The better data on trade were mainly due to a fall in imports from countries in the rest of the EU, Britain’s main trading partner.

Still, British exporters must continue their efforts to diversify trade towards new markets, especially as the EU continues to struggle. The latest figures suggest that much of the improvement has been down mostly to the fact that imports are falling, not that exports are rising.

UK’s Import and Export Indicators and Statistics at a Glance (2012)

Total value of exports: $481 billion

Primary exports – commodities: manufactured goods, fuels, chemicals; food, beverages, tobacco

Primary exports partners: Germany (10.9 percent), US (9.9 percent), Netherlands (7.9 percent), France (7.4 percent), Switzerland (7.1 percent), Ireland (6 percent), Belgium (5.3 percent)

Total value of imports: $646 billion

Primary imports – commodities: manufactured goods, machinery, fuels; foodstuffs

Primary imports partners: Germany (12.5 percent), China (8.2 percent), Netherlands (7.1 percent), US (7 percent), France (5.7 percent), Belgium (4.8 percent), Norway (4.7 percent)

Read more about the UK’s economy, including industry information, featured analysis and trade statistics below.

The post UK Exports, Imports and Trade appeared first on Economy Watch.

During the heyday of the British Empire, the UK was the largest and most influential economy in the world. As the birthplace of the industrial revolution, the UK was at the forefront of technological advances during the 18^th to 19^th century.

During the heyday of the British Empire, the UK was the largest and most influential economy in the world. As the birthplace of the industrial revolution, the UK was at the forefront of technological advances during the 18^th to 19^th century.

However other countries, and in particular the US, began to catch up to the UK technologically wise. Meanwhile, the UK’s global influence was also beginning to wane as many British colonies were in the process of declaring independence. Finally, the damage received during World War I and World War II severely weakened the UK economy. Although the UK economy has since recovered from both World Wars, it is unlikely to reclaim its former position as the top economic power in the world.

Today, the UK is the 6^th largest economy in the world in 2012 according to GDP (current prices) and the 8^th largest in the world according to GDP (PPP). The UK is also a member of the G7 (now expanding to the G8 and G20), the EU and the OECD (Organisation for Economic Cooperation and Development).

Although the UK economy faced another major setback during the 2008 global financial crisis, the UK government has implemented austerity measures in order to reduce its global debt as well as facilitate for long-term economic growth. These plan aims to lower London’s budget deficit from over 11 percent of GDP in 2010 to nearly 1 percent by 2015. However this has since been revised by the government to 2018.

UK’s Economic Geography

UK’s economy encompasses those of its home nations – England, Scotland, Wales and Northern Ireland. The Isle of Man and the Channel Isles are also considered to be part of the British Isles but have offshore banking statuses.

As a member of the EU, the UK is part of a single market that ensures the free movement of people, goods, services, and capital within member states. Nevertheless, the UK still maintains its own economy and has chosen to continue using the Pound Sterling as its national currency rather than converting to the Euro.

Although 24.88 percent of the UK is considered to be arable land, vast plots of agricultural land have remained uncultivated. Many critics have blamed subsidises provided by the EU Common Agricultural Policy as well as price distortions created by the Metropolitan Green Belt, for the lack of agricultural activity on these lands.

Apart from its arable land, the UK also has a healthy supply of natural resources. In the past, coal and iron ore was a major player in the UK economy. The UK’s primary industry sector was once dominated by coal, which could be found in south Wales, Midlands, Yorkshire, North East England and southern Scotland. However since 1981, the production of coal has fallen drastically by more than 75 percent. In 1981, the UK was the 4^th largest coal producing nation in the world – today the UK is ranked 15^th.

Iron ore production has also played an important role in UK’s industries. As the primary element of steel, iron ore production supports the UK’s steel and manufacturing industries. Under manufacturing, it also assists in the production of automobile and aerospace equipment.

The UK also has the 32^nd largest proven oil reserves and the 44^th largest proven natural gas reserves in the world. Oil mining activities are concentrated on the east coast of Scotland and North East England. The waters in the North Sea off the east coast of Scotland contain nearly half of the UK’s remaining oil reserves, and a quarter of reserves are located in the North Sea near the Shetland Islands. Most natural gas production is also located in the North Sea, with a small amount onshore and in the Irish Sea. However, due to its limited supply, the UK is a net importer of both oil and natural gas.

Presently, a North-South divide exists within the UK, due to a gradual shift in economic focus. In stark contrast to Southern UK, which contains the wealthy financial and technological industries, Northern England and Scotland have seen poor economic performance over the years due its industrial roots. Although the UK government has sought to rectify this imbalance, the uneven distribution of economic wealth in the UK has led to many UK citizens migration from the north to the south – resulting in a housing market problem.

UK’s Population and Labour Force

The population for the UK in 2012 was 63.244 million. Out of this population, 17.3 percent are aged below fifteen, 65.4 percent are between the ages of fifteen and sixty four, while 17.3 percent are aged sixty-five and above. The age groups are not evenly distributed around the country, with some areas having many young adults and children and some areas having large numbers of older people.

The UK has the 20^th largest labour force in the world, with 31.9 million workers. However, unemployment remains high in the UK at 8.02 percent, and is likely to remain so in the wake of the UK’s austerity plans. The UK government has warned that nearly half a million jobs could be lost in the public sector alone as the government continue its cut on public spending.

Currently, 1.4 percent of the labour force are employed in agriculture, 18.2 percent in industries and 80.4 percent in services. However, agriculture may soon face a labour crisis due to an aging labour force and a general lack of interest for agricultural jobs.

UK’s Industry Sectors

Despite only contributing 0.7 percent of UK’s GDP in 2012, Agriculture is still considered an important part of the UK’s economy and society as it produces 60 percent of the UK’s food needs. Agriculture in the UK is highly mechanised and efficient, combining advanced technology with modern farming techniques. Agriculture in the UK is also highly subsidised, both by the UK government and the EU’s Common Agricultural Policy.

Industries were responsible for 21.1 percent of UK’s GDP in 2012. The list of industries include machine tools, electric power equipment, automation equipment, railroad equipment, shipbuilding, aircraft, motor vehicles and parts, electronics and communications equipment, metals, chemicals, coal, petroleum, paper and paper products, food processing, textiles, clothing, and other consumer goods.

Manufacturing of goods is particularly important for UK industries. The UK is the sixth-largest manufacturer of goods in the world according to the value of its outputs. Within manufacturing, the production of automotive or aerospace equipment is a major contributor to UK industries. UK’s aerospace industry is the second largest in the world with companies such as BAE Systems (the world’s second largest defence contractor), and Rolls-Royce (the world’s second largest aircraft engine maker) boasting annual turnovers of around £20 billion.

However, despite the historical importance of agriculture and industries, services is the dominant component of UK’s economy, contributing to 77.2 percent of the nation’s GDP. Finance and banking are by far the UK’s most important services with London being one of the three major economic “command centres” alongside New York City and Tokyo. Important financial institutions located within London include the London Stock Exchange, the London International Financial Futures and Options Exchange, the London Metal Exchange, Lloyds of London, and the Bank of England.

Read more about the UK’s economy, including industry information, featured analysis and trade statistics below.

The post UK Economic Structure appeared first on Economy Watch.

Historically, the UK has been one of greatest economic influencers in the world. As the epicentre of the first Industrial Revolution during the 18^th century, the UK ushered in what economic historians agree to be the most significant event in mankind’s history since the dawn of agriculture.

Historically, the UK has been one of greatest economic influencers in the world. As the epicentre of the first Industrial Revolution during the 18^th century, the UK ushered in what economic historians agree to be the most significant event in mankind’s history since the dawn of agriculture.

The Industrial Revolution changed how agriculture, industries and services functioned – dramatically increasing the rate of production and efficiency while facilitating the growth of globalisation. The Industrial Revolution also saw the advent of many new industries in the UK, some of which remains highly important even today.

UK’s Industry Sectors

Industries were responsible for 21.1 percent of UK’s GDP in 2012. The list of industries include machine tools, electric power equipment, automation equipment, railroad equipment, shipbuilding, aircraft, motor vehicles and parts, electronics and communications equipment, metals, chemicals, coal, petroleum, paper and paper products, food processing, textiles, clothing, and other consumer goods.

Manufacturing of goods is particularly important for UK industries. The UK is the sixth-largest manufacturer of goods in the world according to the value of its outputs. Within manufacturing, the production of automotive or aerospace equipment is a major contributor to UK industries. UK’s aerospace industry is the second largest in the world with companies such as BAE Systems (the world’s second largest defence contractor), and Rolls-Royce (the world’s second largest aircraft engine maker) boasting annual turnovers of around £20 billion.

Agriculture has also strongly benefitted from the Industrial Revolution. Despite only contributing to 0.7 percent of UK’s GDP, Agriculture is still considered an important part of the UK’s economy and society as it produces 60 percent of the UK’s food needs with less than 1.4 percent of the labour force. Agriculture in the UK is highly mechanised and efficient, combining advanced technology with modern farming techniques. Agriculture in the UK is also highly subsidised, both by the UK government and the EU’s Common Agricultural Policy.

However, despite the historical importance of agriculture and industries, services is the dominant component of UK’s economy, contributing to 78.2 percent of the nation’s GDP. Finance and banking are by far the UK’s most important services with London being one of the three major economic “command centres” alongside New York City and Tokyo. Important financial institutions located within London include the London Stock Exchange, the London International Financial Futures and Options Exchange, the London Metal Exchange, Lloyds of London, and the Bank of England.

Read more about the UK’s economy, including industry information, featured analysis and trade statistics below.

The post UK Industry Sectors appeared first on Economy Watch.

The UK economy has endured disappointing growth following the 2008-2009 global financial crisis. Prior to the financial crisis, the economy was experiencing GDP growth rates of around 3 percent; but after the economy contracted by 0.968 percent and 3.974 percent in 2008 and 2009 respectively, the UK could only post a 1.799 percent GDP growth rate (constant prices, national currency) in 2010 – one of the slowest recoveries among the OECD nations.

The UK economy has endured disappointing growth following the 2008-2009 global financial crisis. Prior to the financial crisis, the economy was experiencing GDP growth rates of around 3 percent; but after the economy contracted by 0.968 percent and 3.974 percent in 2008 and 2009 respectively, the UK could only post a 1.799 percent GDP growth rate (constant prices, national currency) in 2010 – one of the slowest recoveries among the OECD nations.

In 2011, the GDP growth rate (constant prices, national currency) was even slower at 0.915 percent; and in 2012, despite an Olympics-boosted bounce back in Q-3, the economy grew by just 0.166 percent (constant prices, national currency) that year. In fact, the UK’s GDP actually contracted at a quarter-on-quarter rate of 0.3 percent in Q-4 2012, exacerbating the government’s struggle to bring down the national debt level, which is expected to rise to 85 percent of its GDP within the next five years.

Part of the reason for UK’s slow economic growth has been the austerity plan put into place by the government in 2010. The UK austerity plan was introduced as a method to reduce a massive debt that had reached record levels after the 2008 global financial crisis. Besides cutting public spending and services, the UK government have also implemented a new wave of tax increases as part of its austerity plan. Although these methods can be effective in reducing the risk of a future debt crisis, it also has the ability to hamper economic growth. A recent Financial Times report suggests that the UK’s “era of austerity” may stretch to 2020 – two years later than the government’s pledge to eradicate the budget deficit by 2018, which had already been revised from 2015.

Consequently GDP growth rates (constant prices, national currency) for the UK are expected to be slow over the next five years. In 2013, the UK economy will grow by 0.688 percent, before achieving a higher growth path from 2014 onwards. However, at forecasted growth rates of between 1.539 percent (2014) to 2.472 percent (2018), growth is still not expected to reach the levels of prior to the financial crisis.

UK’s GDP Forecast

The UK was the 6^th largest economy in the world in 2012 according to GDP (current prices, US dollars) and the 8^th largest in the world according to GDP (PPP). In 2012, the UK’s GDP (current prices) was $2.44 trillion and its GDP (PPP) was $2.336 trillion.

In 2013, the UK’s GDP (PPP) is expected to grow to $2.391 trillion. After which, its GDP (PPP) will grow at a fairly consistent rate over the next five years. From 2014 to 2018, UK’s GDP (PPP) is expected to increase by 3.557 percent to 4.644 percent annually. By the end of 2018, UK’s GDP (PPP) is expected to reach $2.921 trillion.

Similarly, UK’s GDP (PPP) per capita is also likely to experience slow but steady growth annually during the same period. In 2012, UK’s GDP (PPP) per capita was $ 36,941.06, a 1.14 percent increase from 2012. In 2013, this is expected to grow to $37,501.70; and from 2014 to 2018, UK’s GDP (PPP) per capita will grow by an average of 3.29 percent percent annually to reach $44,100.62 in 2018. This will make UK citizens the 23^rd richest in the world.

UK’s Unemployment Forecast

The population for the UK in 2012 was 63.244 million. Out of this population, 31.9 million were employed, making UK the 20^th largest labour force in the world.

However, unemployment remains high in the UK, and is likely to remain so in the wake of the UK’s austerity plans. The UK government has warned that nearly half a million jobs could be lost in the public sector alone as the government continue its cut on public spending.

In 2012, the unemployment rate in the UK was 8.02 percent, a slight increase from 2011’s 8.015 percent. This number is expected to improve in 2013, though any improvement will be minimal at best. UK’s unemployment rate will continue to improve marginally for the next five years. By 2018, unemployment in the UK is expected to drop to 6.466 percent.

UK’s Inflation Rate & Current Account Balance Forecast

Falling oil and food prices saw the UK’s inflation rate (average consumer price change) fall to 2.843 percent in 2012 from 4.454 percent the year earlier – though is this higher than the government target of 2 percent.

In 2013, the inflation rate is expected to drop further to 2.654 percent, providing some relief for households, where wages are rising far more slowly than prices. But inflation is still likely to stay above the government’s target for the next three years, bolstered by external price pressures and administered and regulated prices.  Only by 2017, is inflation (average consumer price change) expected to drop below the 2 percent mark to 1.925 percent.

Meanwhile, the UK has the second largest current account deficit in the world, behind only the US. A collapse in overseas income has pushed the UK’s 2012 current account deficit spiralling to its worst level for more than 20 years at $85.532 billion. Comparatively the deficit was only $32.773 billion just the year before.

The UK has not had a current account surplus since 1983. Weakened exports, especially to the EU, are expected to push its deficit even higher to $105.967 billion in 2013 and $108.329 billion in 2014, though 2015 will begin a mild reversal trend. By 2016, the UK’s current account deficit is forecasted to fall back down to $100.17 billion. Only by 2018 will the deficit drop back below 2012 levels – at $76.782 billion.

Read more about the UK’s economy, including industry information, featured analysis and trade statistics below.

The post UK Economic Forecast appeared first on Economy Watch.

Germany has the largest national economy in Europe, the fourth largest by nominal GDP in the world, and the fifth largest GDP per capita based on purchasing power parity (PPP), and is a founding member of both the European Union and the Eurozone. Germany has a social market economy that combines capitalism with social policies favoring social insurance.

Germany has the largest national economy in Europe, the fourth largest by nominal GDP in the world, and the fifth largest GDP per capita based on purchasing power parity (PPP), and is a founding member of both the European Union and the Eurozone. Germany has a social market economy that combines capitalism with social policies favoring social insurance.

Germany is rich in a number of natural resources, including timber, iron ore, potash, salt, uranium, nickel, copper, and natural gas. Although most energy in Germany comes from fossil fuels, it is leading the way in renewable energy development and use with about 27 percent of its electricity derived from renewable sources. Examples include biomass (wood and biofuels), wind, hydro, solar, and nuclear power. Germany was the first major industrialized nation to commit to the renewable energy agreement called Energiewende, and it has become the leading producer of wind turbines in the world.

Almost 100 percent of all German companies are considered small and medium-sized enterprises and are mostly family-owned. Germany serves as host to the headquarters of 50 of the Fortune 500 global companies.

Economic History

Germany was historically, a tribal area, a part of the Holy Roman Empire, a part of the Prussian Empire, a confederation of states, and a republic. By the 19th century, however, Germany was in control of several nations, as well as a few autonomous states, and the region was poised to take advantage of the Industrial Revolution in ways many other parts of the world could not. This was thanks to its abundant resources, many of which would be required for the manufacture of equipment and goods. Germany entered the industrial age a little after other nations like Great Britain, but quickly leaped to the front of the pack thanks to its Customs Union (Deutscher Zollverein) and its impressive railway system. Between 1835 and 1870, Germany constructed thousands of miles of railway and several companies made locomotives domestically.

The creation of a rail system across Germany, coupled with a free trade environment, led to incredible economic development and opened new markets and new ways of doing business. A unified monetary system, the deutsche mark, further aided local economic development with its introduction and adoption in 1871. Prior to that, silver coins had been the preferred currency of trade, and they remained in favor until 1907.

The German Empire was born in 1871, after the defeat of Napoleon and the French army. The newly formed German state benefited greatly from the influence of French economic principles. Nonetheless, political decisions about the economy remained concentrated in the hands of a relatively small group of agricultural and business interests.

Chancellor Otto von Bismarck took power between 1881 and 1889 and introduced laws that provided social insurance, welfare, and improved working conditions. Bismarck’s programs included universal health care, compulsory education, sickness insurance, accident insurance, disability insurance, and a retirement pension. The compulsory education program led to a world leading 99 percent literacy rate, and created a culture that produced some of the greatest minds of the 20th century.

By 1900, Germany produced more steel than either Great Britain or the United States. Industry accounted for 60 percent of the German GDP in 1913, and, by 1914, Germany was the world’s leading producer of chemicals and electrical equipment.

Unfortunately, that prosperity could not last. Germany was heavily involved in the First World War, and found its economy significantly damaged after the war. Out of control inflation, skyrocketing unemployment, and debts related to the payment of reparations left the economy ripe for political unrest and turmoil

This was the perfect breeding ground for radical ideas, and thus, the Nazi party rose to power. The Nazis took control of the government during some of the highest rates of unemployment in German history, but they achieved full employment in just a few years thanks to massive public works programs. When Germany began rearming (in contravention of the Treaty of Versailles), the expenditure father bolstered the economy and the popularity of the Nazi party.

The Nazis wished to attain self-sufficiency but lacked the resources to support their large population. This was part of the motivation for invasion of neighboring Poland and other parts of Europe. The Nazis also disfavored trade unions and abolished them in 1933.

After the war, Germany was split into two countries, East and West. West Germany developed a democratically driven social capitalist economy similar to what exists today, while East Germany became a part of the Eastern Bloc of Soviet Communist States. The two nations evolved very differently, with West experiencing exports of $323 billion in 1988 while East only managed $30.7 billion.

The former Soviet Bloc countries toppled in 1989, with the wall separating East and West Germany knocked down as a practical and symbolic representation of removing the division between the two countries and unifying their ideologies.

Current Economic Situation

As of 2013, Germany is the third largest exporter and importer in the world, producing the largest trade surplus as a national economy. While the unified German economy grew well during the 1990s, it experienced a virtual stagnation beginning in the 2000s. With chronically high rates of unemployment and relatively flat growth figures of only about one to one and a half percent, the German welfare system came under considerable strain. By the end of 2000s, the economy followed a global trend toward growth thanks to its large export economy. Unfortunately, it also suffered an economic contraction after the global recession in 2009.

Thanks to swift economic reforms, Germany exited the recession almost as quickly as it entered it, achieving recovery thanks to an ambitious economic recovery plan by the end of 2009. Growth continued through 2012 at a rate higher than its local neighboring nations. By 2014, Germany recorded the highest trade surplus in the world.

Today, Germany’s economy is largely made up of a service sector (around 70 percent of the total GDP), a robust industry (29.1 percent of GDP), and a small but notable agricultural sector (0.9 percent of GDP). The nation’s national output derives from exports (41 percent): including vehicles, machinery, chemical goods, electronic products, electrical equipment, pharmaceuticals, transport equipment, metal, food products, rubber, and plastics.

Economic Forecast

Germany had a solid year for growth in 2014, driven largely by private consumption. The economy has experienced a few bumps in the road in 2015, but overall it appears to still be on steady footing. Consumer confidence reached a 13-year high in May, and the German government allocated €13.5 billion for infrastructure improvements and investment through 2018. Low international oil prices and a strong labor market with higher wages argue well for domestic consumption, while exports will likely increase on the back of a weak euro. As a result, the German economy is expected to grow by 1.9 percent in 2015 and remain there for 2016.

The post Germany Economy appeared first on Economy Watch.

Germany is the third largest exporter and importer in the world, accounting for more than half of the European Union’s international trade. Since January 1 1995, Germany has been a part of the World Trade Organisation, existing both as an individual nation and as part of the EU (known officially as the European Communities in the WTO until 30 November 2009).

Germany is the third largest exporter and importer in the world, accounting for more than half of the European Union’s international trade. Since January 1 1995, Germany has been a part of the World Trade Organisation, existing both as an individual nation and as part of the EU (known officially as the European Communities in the WTO until 30 November 2009).

Much of Germany’s exports focuses on industrially produced goods and services. In particular German mechanical engineering products, vehicles, and chemicals are highly valued internationally. Around one euro in four is earned from exports and more than every fifth job depends directly or indirectly on foreign trade.

Exports of goods and services also made up about 52 percent of its GDP. Significantly, EU integration has greatly intensified intra-European trade, with about 69 percent of German exports shipped to European countries and 58.2 percent delivered to member states of the EU.

Within the EU itself, Germany’s most important trading partner continues to be France (9.5 percent of total exports). Meanwhile 7.9 percent of German exports went to the US in 2012 and 6.6 percent to the UK.

Most of the goods imported to Germany originated from the Netherlands. Germany imported goods worth 86.6 billion euro from the Netherlands (9.5 percent of total German imports), with China and France accounting for the next highest imports.

Germany’s Import and Export Indicators and Statistics at a Glance (2012)

Total value of exports: $1.492 trillion

Primary exports – commodities: motor vehicles, machinery, chemicals, computer and electronic products, electrical equipment, pharmaceuticals, metals, transport equipment, foodstuffs, textiles, rubber and plastic products

Primary exports partners: European Union (58.2 percent of total exports), US (7.0 percent), China (6.1 percent), Switzerland (4.5 percent), Russia (3.3 percent)

Total value of imports: $1.276 trillion

Primary imports – commodities: machinery, data processing equipment, vehicles, chemicals, oil and gas, metals, electric equipment, pharmaceuticals, foodstuffs, agricultural products

Primary imports partners: European Union (54.8 percent), China (8.9 percent), US (5.5 percent), Switzerland (4.2 percent), Russia (3.3 percent)

Read more about Germany’s economy, including industry information, featured analysis and trade statistics below.

The post Germany Exports, Imports & Trade appeared first on Economy Watch.