Analysis of German Economy

 by - Kushal Bafna

The German economy is s mixed economy and is the 16th freest economy in the 2015. It’s freedom level has increased by 0.4% over the last year.

*the following data is as of September 2015.

Population : 80.8 million

**GDP : - $3.2 trillion

  - 0.5% growth

  - 0.7% 5 year compound annual growth

  - $40.007 per capita

**Unemployment : 5% (rounded off)

**Inflation : 1.5% (approx.)

**Out of 100 points, the German economy is about 13 points higher than the average world economy freedom of 60.4. 

Strengths : The German economy relies mainly on automobile, electronic and chemical industries.        It is the native country of major companies such as :-

      1. Mercedez-Benz

      2. BMW

      3. SAP

      4. Siemens

      5. Volkswagen

      6. Adidas 

      7. Audi

      8. Allianz

      9.Porsche

    10. Bayer

    11. BASF

    12. Bosch

    13. Nivea.

*as of 2011

***

Company	Revenue (million in euros)	Profit (million in euros)	Employees (World)
Volkswagen AG	1,59,000	15,800	5,02,000
Diamler AG	1,07,000	6,000	2,71,000
Allianz	1,04,000	2,800	1,41,000
Siemens AG	74,000	6,300	3,60,000
BASF SE	73,000	6,600	1,11,000
BMW AG	69,000	4,900	1,00,000
Total	5,86,000	42,400	14,85,000

 

These select companies of the automobile and electronics industries alone earn  5,86,000 million euros per year, make a profit of 42.400 million euros per year and provide 14,85,000 jobs worldwide.

German soil lacks too many raw materials, except brown coal and potash salt. Germany also has multiple uranium fields.

***Agriculture in Germany is the 3rd largest in Europe, provides 9/10th of the required nutrients.

Infrastructure is more than adequate, is the foundation of it’s automobile, electronics and chemical industries. Railway systems, airports are one of the most sophisticated in the world.

Solar and wind power is abundant. The government at the current rate will provide 50% of electricity for Germany through renewable resources, by 2050.

Conclusion: Germany has one of the most flexible, progressive and strong economy in the world. It’s economy shows us how utilisation of scarce resources is optimum and the opportunity cost has been kept to a minimum. The balance of produced goods is very good and distribution of produced goods/income is well done, benefits the masses. What it lacks in natural resources, it makes up in industries and infrastructure. Investing in the stock markets, both domestic and foreign is easy and important to the economy. The German economy is very vital for the world and especially the volatile European Union (EU). The EU would be in a state of greater crisis, should anything happen to the German economy. At the current rate, Germany’s economy is only going to get stronger and increase Germany’s financial significance in the world. 

WORK CITATIONS

 ‘**’ - 2015 Index of Economic Freedom - www.heritage.org/index/country/germany

‘***” - Economy of Germany - https://en.wikipedia.org/wiki/Economy_of_Germany