Germany's Economy

Germany at present is the world's third largest economy in terms of its value in US dollar exchange rates and first among all European countries. With an estimated GDP or PPP (purchasing power parity) of 2.585 trillion dollars as of 2006, Germany ranks as fifth among all world economies by GDP rank. Its GDP growth rate as of 2006 is about 2.7% annually and is foreshadowed to grow even more in the future. All these statistics and estimated values however point out the simple fact that Germany's economy is one of the world's most powerful world economies at the moment.

A capitalist market is predominant in the Federal Republic of Germany, which is why competition is a market under a free enterprise set-up is encouraged and is supported by the government government economic policies and laws. Being an active member of the European Union or the EU, the currency of Germany is the Euro or the European currency. Aside from its currency, Germany is also very supportive of the European Union's goal to form a well-integrated and unified European economy.

It cannot be denied that Germany's economy is primarily export oriented. At present, Germany is considered as the world's largest exported, with more than a third of the country's national output solely coming from the export industry or around 1.133 trillion dollars worth of export merchandise and services in 2006. The primary export item of Germany are vehicles (estimated 145.5 billion worth of exported vehicles), followed by machinery, chemical products, and electronic devices. Aside from vehicles, machinery and consumer electronic products, Germany is also a large exporter of foodstuffs, metals, textile products and the ever popular beer.

It is evident that the export industry of Germany and the other major industries in the country are closely related. Some of the main industries of the country include, shipbuilding, production of textiles, coal, foodstuffs, chemicals, machinery, metals and vehicles which are also some of the country's main exports. Germany's export industry has a 9% growth rate and is expected to show more growth in the future.

Domestic structural problems however, exist in German economy in the form of the difficulty of integrating the past communist Eastern Germany into the nation's economy. It is expected that a complete integration of Eastern Germany would be take several decades to actually happen and as the nation works on achieving that, about 100 billion dollars is used to fuel Eastern Germany's economy annually.