Brandenburg Gate in Berlin, Germany

Germany Economy

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.


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.


The unemployment rate averaged 6.0% in the decade to 2022. For more information on Germany's unemployment click here.


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 release confirmed that GDP contracted 0.3% in Q4. This means that in Q4, overall GDP was roughly flat from seven quarters prior, marking the worst performance among G7 economies as Germany struggled with higher energy costs, soaring interest rates and weak foreign demand due to its reliance on its manufacturing sector to power growth. Turning to Q1, our panelists expect GDP to stabilize as exports begin to recover after five quarters of shrinkage. Business conditions in the manufacturing sector deteriorated the least in 11 months in January, according to PMI data, as world trade began to recover after a sluggish 2023. Less positively, domestic demand is likely to remain tepid on sticky inflation and past rate hikes; in January, economic sentiment worsened, and business conditions in the services sector deteriorated according to PMI data.
Projections out to 2033.

59 indicators covered including both annual and quarterly frequencies.

Consensus Forecasts based on a panel of 57 expert analysts.

Want to get insight on the economic outlook for Germany in the coming years? FocusEconomics collects projections out to 2033 on 59 economic indicators for Germany from a panel of 57 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 .

Germany Economic Data

2018 2019 2020 2021 2022
Population (million) 82.9 83.1 83.2 83.2 83.8
GDP (EUR bn) 3,365 3,474 3,404 3,617 3,877
GDP per capita (EUR) 40,594 41,810 40,929 43,481 46,264
Economic Growth (Nominal GDP, ann. var. %) 3.0 3.2 -2.0 6.3 7.2
Economic Growth (GDP, ann. var. %) 1.0 1.1 -3.8 3.2 1.8
Domestic Demand (ann. var. %) 1.6 1.5 -3.1 2.5 3.2
Private Consumption (ann. var. %) 1.5 1.6 -5.9 1.5 3.9
Government Consumption (ann. var. %) 0.8 2.6 4.1 3.1 1.6
Fixed Investment (ann. var. %) 3.4 1.7 -2.4 -0.2 0.1
Exports (G&S, ann. var. %) 2.2 2.3 -9.3 9.7 3.3
Imports (G&S, ann. var. %) 4.0 3.4 -8.3 8.9 6.6
Industrial Production (ann. var. %) 0.9 -2.3 -7.7 3.6 -0.9
Retail Sales (ann. var. %) 1.8 3.2 4.8 0.6 -0.7
Disposable Income (ann. var. %) 3.7 2.4 1.1 2.5 6.1
Wages (ann. var. %) 3.0 3.0 2.2 1.5 2.6
Unemployment (% of active population, eop) 5.0 5.0 6.1 5.2 5.5
Unemployment (% of active population, aop) 5.2 5.0 5.9 5.7 5.3
Fiscal Balance (% of GDP) 1.9 1.5 -4.3 -3.6 -2.5
Public Debt (% of GDP) 61.9 59.6 68.8 69.0 66.1
Inflation (HICP, ann. var. %, eop) 1.7 1.5 -0.7 5.7 9.6
Inflation (HICP, ann. var. %, aop) 1.9 1.4 0.4 3.2 8.7
Inflation (PPI, ann. var. %, aop) 2.6 1.1 -1.0 10.5 32.9
ECB Refinancing Rate (%, eop) 0.00 0.00 0.00 0.00 2.50
ECB Overnight Deposit Rate (%, eop) -0.40 -0.50 -0.50 -0.50 2.00
3-Month EURIBOR (%, eop) -0.31 -0.38 -0.55 -0.57 2.13
10-Year Bond Yield (%, eop) 0.24 -0.23 -0.62 -0.18 2.56
Stock Market (var. of DAX %) -18.3 25.5 3.5 15.8 -12.3
Exchange Rate (USD per EUR, eop) 1.14 1.12 1.22 1.14 1.07
Exchange Rate (USD per EUR, aop) 1.18 1.12 1.14 1.18 1.05
Current Account Balance (EUR bn) 268 263 239 265 145
Current Account Balance (% of GDP) 8.0 7.6 7.0 7.3 3.7
Merchandise Trade Balance (EUR bn) 228.7 224.0 180.4 175.3 88.6
Foreign Direct Investment (EUR bn) 63.0 46.9 45.9 40.9 10.4


  1. What type of economic system best describes Germany?

  2. Germany's economic system is best described as a social market economy. This system combines a free-market capitalist approach with social policies that establish a degree of government regulation in the economy and a welfare state. In summary, it emphasizes both economic efficiency and social equity.

  3. Why is Germany's economy so powerful?

  4. Germany's economy is powerful due to its highly skilled labor force, strong industrial base, leading position in engineering and manufacturing (especially automotive and machinery), robust export sector, and effective social market economic model.

  5. Is Germany doing well economically?

  6. Germany's economy is currently struggling. Drags on economic growth stem from the fallouts of the war in Ukraine, high energy prices and tight monetary policy.

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