German Economy Essay

One of the major sectors of German economy is the exports of this country that has accounted for a great percentage of financial output. In this regard, more than twenty-five percent of the national German output has been due to the heavy exports that have increased significantly during the last decade. In the year 2004, GDP of Germany was contributed by forestry, mining, and agriculture sector at a very lesser extent, as compared to the other sectors in the country. Despite Germany is going through a high level of industrial revolution, forest has covered more than twenty-five percent of German’s territory. In the year 2003, more than seventy percent of Germany’s gross domestic product was accounted by services sector of the country. In this regard, more than seventy percent of the workforce was employed by this sector. On the other hand, metals, textiles, chemicals, vehicles, foodstuffs, and machinery are major imports of the country, which plays a vital and crucial role in the economy of Germany. In the year 2003, a positive of US$55 billion was the account balance of payments and currency of Germany. The paper will now discuss the abovementioned areas of German economy with detailed analysis, and hope will be beneficial for experts and economists in the better understanding of German Economy. In this competitive era, a number of economies are enjoying a vital position, and Germany is one of the countries that have been able to construct a very important place in terms of its economy. In terms of exchange rate of the United States, the German economy is considered the third largest out of the other major economies of the world. Moreover, the economy of Germany has a very strong power of purchasing, which has resulted in its place as the fifth largest around the globe. In the European continent, the economy of Germany is the largest of all the other economies, which has provided it with a number of opportunities and significance in this economic world. Geographically, Germany enjoys a central place in the continent, which is one of the other reasons behind the significance and exposure of opportunities to the German individuals and businesses. A number of difficulties and confrontations can be observed in the economic history of Germany, such as structural problems related to the East Germany, as well as, different structural problems that have continued since a last decade in the country. (Smyser, 1993) The German government has imposed and implemented a number of policies that have provided significant opportunities for its economy to strengthen in the world. In this regard, one of the major steps taken by the German government is the promotion of establishment of free enterprises, as well as, competition that has provided a competitive and friendly environment to the businesses and individuals in the country. However, various sectors are selected for the distribution of financial support by the state organizations. In the response of such steps taken by the government and related organizations, the economy of Germany has achieved a momentous space in the midst of other economic powers of the globe. In addition, different sectors have achieved strategic importance with the help of different policies by the German government. Thus, a number of factors and reasons are responsible and should be credited for the strengthening and powerful role that has been played by economy of the Germany. One of the major sectors of German economy is the exports of this country that has accounted for a great percentage of financial output. In this regard, more than twenty-five percent of the national German output has been due to the heavy exports that have increased significantly during the last decade. In the result, German economy has expanded traditionally in a macroeconomic manner with the support of heavy exports from different business sectors and industries of the country. Moreover, economic and political incorporation is another basic policy of the German economy, and such policy has been promoted on the continental level in the Europe. In the result, the European Union and its member countries have appreciated and encouraged the introduction and implementation of German economies policies at a higher extent. (Siebert, 2005) Similarly, a number of legislations related to the single markets in the European Union have been established and formulated based on German economic policies. The Euro is the common European currency used by most of the countries in the European continent. In this regard, Germany has implemented the usage of same currency in the country, which has resulted in the exposure of more opportunities related to the strengthened economy of Germany in the region. Frankfurt city in the Germany has the European Central Bank, which is responsible for the formulation of monetary policy of the country, which decides the future prospects for the coming years related to the economy of Germany. (Smith, 1994) Addressing domestic structural problems is another major concern of the German government, which has been agreed and encouraged by most of the German and the foreign experts in the region. In the year 2003, the labor market was deregulated by the gradual steps of German government. In this way, high unemployment rate was tackled in an effective manner. In the West Germany, more than seven percent of fall was observed in the unemployment rate in the country, which was the visible fact of deregulation of the labor market. However, there is still a huge room for improvement in the eastern part of Germany, which has an employment rate of more than fourteen percent in the region. (Scott, 2002) However, the German government is playing a vital role in the addressing of different issues related to the economy of Germany. For instance, high non-wage labor costs have also been addressed by the government with the help of implementation of different policies related to it. Many businesses were burdened due to the imposition of bureaucratic parameters in the past, which was addressed by the present and previous governments during the last decade. Nowadays, it has become quite easy and trouble-free to establish a business in the Germany. New entrepreneurs have been encouraged, especially, in the export sectors of the country. In the result, a major and significant improvement can be observed in the economy of Germany, which is very much export-oriented in nature. (Siebert, 2005) In terms of facts, nine percent of growth was observed in the export year of 2007. In the result, some of the business experts deemed the Germany as the biggest exporter in the world. In the year 2006, more than two percent of growth was observed in the gross domestic product of the country. Moreover, it is estimated that the following years will achieve higher percentage of GDP due to excellent growth in the exports of the country. However, the domestic market of the country is confronting structural problems that can result in some economic issues in the country. Over more than a decade, the labor sector is confronting stagnant wages, which is one of the crucial causes behind the weakness of the domestic market in Germany. In Germany, reunification is financed with the contributions of social insurance companies. Since the 1990s, high wage demands are not observed in unions in the Germany, which has resulted in the conservation of competitiveness among the German workers. Between the years 1990 to 2005, two percent of decline was observed in the net income on an average in Germany, according to the Federal-Statistical Office of the country. However, wage demands from the unions have been raised significantly, as compared with the abovementioned union demands. In the year 2004, GDP of Germany was contributed by forestry, mining, and agriculture sector at a very lesser extent, as compared to the other sectors in the country. Approximately two percent of German population was given employment in the abovementioned sectors. The eastern states of the country have reported to observe a great reduction in the employment rate. After the reunification process, more than seventy percent of workers in the agricultural sector were declined. However, domestic production in the agricultural sector resulted in the fulfillment of more than ninety percent of dietary and food requirements of the country’s population. In the European Union, the agricultural production is being lead by Germany, which has been followed by Italy and France in the European continent. In this regard, wheat, barley, cabbages, and potatoes are some of the major agricultural products in Germany.