German economy

The main articles are:

• Germany
• World economy

GDP

Main article: Germany's GDP

Financial system

Bundesbank - Central Bank of Germany

2023: Plan to cut 5% of staff as recommended by BCG

In September 2023, it became known that the Central Bank Germany intends to cut about 5% of jobs as part of the "modernization process." Unrest has been brewing in the Bundesbank, a conservative and secretive pillar of the German establishment, since Joachim Nagel became its president in 2022 and hired to Boston Consulting Group make it more flexible and effective, she wrote [1] FT

Representatives of the Central Bank of Germany are outraged by the plan of "modernization." "The mood among employees is at the very bottom," one insider said. "BCG has no idea how the central bank operates and what its legal responsibilities are. They compared the work on monetary policy to the production of cars, which is complete nonsense. "

2019: €6bn profit

Gold reserves

Sovereign Wealth Fund

Currency: Euro

Main article: Euro (currency)

Non-financial debt

2022: Aggregate non-financial debt

National debt

Main article: German State Debt

Budget

2023: Trying to contain Russia's development, Germany suffers budget crisis and increases debts

The budget crisis Germany is deepening with a funding freeze for the current year. The Treasury Department in November blocked virtually all spending for 2023. Existing obligations will be fulfilled, new ones are not allowed.

The German government should not try to bypass the debt brake by exploiting loopholes, the Bundesbank said in November 2023.

2021: Post-COVID-19 Pandemic Support Program

EU The Next Generation program - 750 billion euros (915 billion) dollars in grants and loans aimed at stimulating economic recovery - will begin in June 2021, with Southern countries receiving the lion's share. Europe

According to Bloomberg Economics, the program will allocate funding equivalent to almost 1% of the eurozone's GDP annually from 2022 to 2024, with spending gradually increasing from the second half of 2021.

2018: Military budget 1.2% of GDP

Military budget in% of GDP, 2018:

• 8.8% Saudi Arabia
• 4.3% Israel
• 3.9% Russia
• 3.2% United States
• 2.5% Turkey
• 2.4% India
• 2.3% France
• 1.9% Australia
• 1.9% China
• 1.8% United Kingdom
• 1.3% Canada
• 1.2% Germany

(SIPRI)

Inflation

Main article: Inflation in Germany

Key rate

Crediting

Mortgage

The volume of new mortgages in Germany more than halved in February 2023 compared to the same period last year. The 54% drop is the worst on record.

Investment in Germany

2022: Continued decline in foreign direct investment for 5 consecutive years

In 2022, more than 135 billion euros of direct investment flowed from Germany, while only 10.5 billion euros were received.

German investment

2024: Private equity growth in China to €7.3 billion in the first half of the year

Main article: Foreign investment in China

Germany's direct investment in China continues to grow, with companies ignoring their government's calls to diversify into other, "less geopolitical risky markets."

Investments amounted to €2.48 billion in the first three months of 2024, increasing to €4.8 billion in the second quarter. Thus, the total investment for the first half of 2024 reached €7.3 billion, compared with €6.5 billion for the entire 2023.

2023: China investment growth to record €11.9 billion for the year

Germany's direct investment in China rose 4.3% to a record high of 11.9 billion euros ($12.7 billion) in 2023. The data confirms that German firms continue to invest heavily in China, despite government calls for them to cut investment in that country.

2021: German government sets up €10bn fund to invest in start-ups in early stages

At the end of June 2021, the German government announced the creation of a 10 billion euro investment fund to support technology startups within the country. The new fund will focus on financing developers at an early stage of growth, but with high capital requirements. Read more here.

2020: Sixth largest investment in Africa

Stock market

• DAX (Index)

2024: Issuers capitalization 55% of GDP or 2.1% of the global market

By June 2024, Germany is lagging behind in the global stock market race due to the lack of large technology companies.

The value of all German shares at this time is only 2.1% of the capitalization of the global market. In 2023, this figure was significantly higher - 2.4%. Only two German companies, SAP and Siemens, are among the 100 largest listed companies.

Businessmen

Billionaires in Germany

2021: The richest 1% of citizens account for 29.2% of the population's assets

2020: 3rd in the world in the number of billionaires - 107

Mining

Lithium mining

The "triangle" of South America and Mexico as of April 2022 accounts for 60% of the world's lithium deposits.

Energy supplies

Main article: Import of gas, coal, oil and petroleum products in Europe

• Uniper - LNG importer
• Sefe is an importer of pipeline gas from Norway, a company illegally taken from Russian Gazprom.

2024: 15-year gas agreement with UAE's Adnoc to supply 1 million tonnes of LNG per year from 2028

In March 2024, the UAE entered into a 15-year gas agreement with Germany.

Adnoc will supply SEFE with 1 million tons of LNG per year.

Deliveries from the Ruweis LNG plant, which Adnoc plans to build, will begin in 2028.

2023

Gas deal with Norway's Equinor until 2034 for €50bn

German energy company Sefe on December 19, 2023 entered into a 50 billion euro ($55 billion) gas deal with Norwegian Equinor, providing a third of the industrial needs of Europe's largest economy in gas.

Norway has been the main supplier of natural gas to Germany since the country withdrew supplies from Russia in August 2022. Norway currently accounts for approximately 40-50% of gas imports to Germany.

The supply deal provides for the supply of about 10 billion cubic meters of gas per year from January 1, 2024 to 2034, as well as an option for another five years for 29 billion cubic meters.

Sharp decline in oil consumption due to industrial crisis

Oil consumption Germany in 2023 will decrease sharply, as the crisis in the largest European economy reduces demand for vital industrial fuels.

As of October, the drop in consumption in 2023 will be the second largest in the world (more only in Pakistan).

Germany admits that cheap Russian gas gave a powerful impetus to the development of the German economy, providing 10 years of growth in a row

Former chief economic adviser to German Chancellor Angela Merkel Lars-Hendrik Röller in September 2023 admitted that the abundant and cheap exports of Russian energy gave a powerful impetus to the development of the German economy, providing 10 years of growth in a row.

Röller also stressed that Merkel, who served as chancellor from 2005 to 2021, had no choice but to make a big bet on Russian gas after deciding to phase out nuclear power. "You can argue about whether it was done right, but there was a consensus in society at the time," he said.

Three floating terminals receive LNG from the United States

As of September 2023 Germany , there are three floating LNG import terminals in operation and new ones are planned to be built. Most of the LNG for Germany's three floating terminals comes from. USA

LNG terminal at Rügen cancelled after environmental protests

Agreed by energy corporation RWE, including with the United States as the main gas supplier, the construction of the LNG terminal at Rügen was canceled in May 2023 after a series of environmental protests.

The cancellation of construction became quite unexpected, the LNG terminals in Rügen were supposed to compensate for the volumes of gas that fell after the explosion of the Nord Stream gas pipelines.

State contributions to pay for energy by citizens and companies reached 7% of GDP

Reduction in oil imports from Russia by 99.9% in January

Imports of Russian oil to Germany decreased by 99.9%. According to the German Statistical Office, in January 2023, the country imported only 3.5 thousand tons of Russian oil, while in January 2022 - 2.8 million tons.

2022

Year-end reduction in gas consumption

The cost of not yet built floating LNG receiving terminals in Germany has tripled to 10 billion euros

In 2022, the cost of yet to be built floating LNG receiving terminals in Germany more than tripled and by December 2022 amounted to 10 billion euros, the German Ministry of Economy reported in February 2023.

Nationalization of Russian fuel importers Rosneft Deutschland and RN Refining & Marketing

In September 2022, it was announced that the German Government was transferring oil importers Rosneft Deutschland and RN Refining & Marketing under the control of the German regulator, the Ministry of Economy said.

Plan to purchase 13 billion cubic meters of LNG failed due to lack of gas carriers

The German government planned to deliver 13 billion cubic meters of gas by sea via LNG to Germany in the first half of 2023, which would partially replace the energy resources purchased from Russia.

The government's LNG strategy, prepared by Vice Chancellor Khabek, "failed and will not be able to provide the gas that is needed in the coming winter," Bild stated in July 2022.

The problem lies in the lack of opportunities for Germany to find the vessels necessary for the transportation of LNG. "There are no gas tankers in Germany's merchant fleet that can carry LNG over long distances. In total, almost 500 LNG tankers are available around the world, but demand from other countries is high, "experts stressed.

Germany announced a plan to abandon Russian gas and coal

On February 24, 2022, the German Federal Ministry of Economy and Climate Protection announced its desire to abandon the country's use of Russian energy resources (coal and gas). The reason is the beginning of Russia's military operation in Ukraine.

For 2021 Russia , it sends most of its coal to Asia, as it Europe avoids this fuel.

We will have to buy gas, as well as coal in other countries in a more significant amount, because we cannot depend so much on a country that does not comply with more international law, "said the head of the Ministry of Economy of the Federal Republic of Germany and Vice-Chancellor Robert Habek.

According to him, the Nord Stream-2 main gas pipeline from Russia to Germany through the Baltic Sea will hardly be possible to launch in the medium and short term, but political efforts should be aimed at de-escalating the situation.

Khabek added that in the short term, in light of the situation around Ukraine, gas and oil prices in the markets may rise. On February 24, 2022, the price of gas in Europe soared to $1,400 per 1,000 cubic meters. m under the March contract after closing at $1,041 per 1,000 cubic meters. m the day before.

We have a need of about 90 billion cubic meters of gas per year. The capacity of German gas storage facilities is 23 billion cubic meters of gas in case of full filling. There is potential for LNG to guarantee supplies in winter, "said Robert Habeck.

German steel, chemical and paper industries will halt within weeks if the country decides to halt energy imports from Russia, the country's largest industrial unions said on March 29, 2029.

"The consequences will not only be the reduction of working hours and job losses, but also the rapid collapse of industrial production chains in Europe - with consequences around the world."

IG Metall, IGBCE, IG Bau opposed energy sanctions.

On February 23, 2022, US President Joe Biden imposed restrictions against the operator of Nord Stream 2 and its officials. According to him, this step is another part of the initial tranche of sanctions in response to Russia's actions in Ukraine

The German authorities will suspend the certification of Nord Stream 2, German Chancellor Olaf Scholz said on February 22, 2022. According to him, the situation should be re-assessed after Russia recognizes the LPR and DPR - this will also affect Nord Stream-2^[1]

2019-2020

Lignite and Coal Waiver Act to 2038

In July 2020, Germany adopted a law on the rejection of the use of brown and coal until 2038.

According to the law, the use of coal for energy production may completely cease as early as 2035. A total of 40 billion euros will be allocated to support the regions whose economies will suffer due to the abandonment of coal.

In addition, owners of power plants that run on brown coal and stop working until 2030 will receive compensation totaling 4.35 billion euros. Owners of coal-fired stations will also receive compensation, but their amount will depend on the tender.

In 2017, coal accounted for more than 40% of all fuels used for electricity production in Germany. This is considered the main reason for the increase in greenhouse gas emissions into the atmosphere.

Import of 2/3 of gas from Russia

Power

Main article: Power Germany

Industry

Main article: German industry

Telecommunications market

Main article: Communication (German market)

Digitalization

IT market

Main article: German IT market

Video Surveillance (German Market)

2022: More than 4,000 CCTV cameras on the roads

Foreign trade

Main article: German Foreign Trade

Labour market and unemployment

Main article: Labour market and unemployment in Germany

Household income, salaries and pensions

2023

Inflation brings real wages back to 2016 levels

Inflation has returned real wages in Germany to 2016 levels, a study shows.

Financial assets of private households grew by 6.5% to a record €7.9 trillion

Private households Germany are richer than ever before, at least in nominal terms. Financial private household assets grew by 6.5% to a record €7.9 trillion at the end of 2023.

In addition to a significant rise in share prices and high savings rates, rising interest rates contributed to the increase in financial assets.

Childless employees in Germany begin to cut salaries

At the end of May 2023, the Bundestag adopted a social security reform, according to which childless employees will be reduced salaries.

From July 2023, they will pay an increased Social Security tax. The point is that people with children will have someone to look after in old age, and the state will have to look after the lonely - so you will have to pay. On average, childless employees will begin to receive 60 euros less.

Due to the increase in costs, the traffic light coalition reform provides for an increase in the contribution to the long-term care insurance system by 0.35 percentage points from July 1, 2023 - for people without children, the amount is even higher. Currently, the contribution is 3.05% of the gross salary, and for persons without children - 3.4%. In order to stabilize long-term care insurance, higher premiums should be introduced as early as July 1 - with the exception of families with several young children.

As Minister of Health Karl Lauterbach explained, the reform is to financially provide medical care until 2025 and annually mobilize another 6.6 billion euros for this purpose.

FDP health expert Andrew Ullmann spoke on Deutschlandfunk radio about the "big contribution" to improving the quality of care. However, this cannot be stopped. The wish list is "infinitely large," but financial resources are limited.

According to statistics from the EU authorities for 2022, for each woman there are 1.3 − 1.4 children in Germany. According to the Berlin Institute, 40% of childless married couples aged 18 to 49 prefer to think about careers and do not want to give birth to children.44% said they do not have a "real partner to start a family," a third of those surveyed prefer to remain^[2]

Minimum wage - $1594

The minimum retirement age is 65 years and 10 months

2022

Real salary growth by 15% over 22 years

Decrease in real income per employee in the third quarter by 4.3%

in

The fall in real incomes of the population amid the rise in inflation

Although nominal wage growth in Germany by 4% compared to 2020 was the fastest since before the COVID-19 pandemic, inflation was even faster - in the first quarter of 2022 it reached 5.8%.

2021: Germany stopped paying benefits to those who lost their jobs who were not vaccinated against coronavirus

On September 22 health care Germany , 2021, the ministry announced that the government will no longer pay benefits to those who have lost their jobs who have not been vaccinated against coronavirus. COVID-19 The move could help boost the country's vaccination campaign. More. here

2020: Median retirement age - 63

2018: Salaries of top officials in government management

2017: Average monthly salary

German electronic payment systems

2020:49% of Internet users prefer cashless payment

Retail

2023: Sharp decline in retail sales

Retail sales in Germany in December 2023 fell 4.4% compared to the same period last year. That means even Christmas sales have failed.

Germans went on a buyer strike after a spike in inflation and even cut the number of gifts for children over the Christmas season. It also explains why Germany has the toughest competition in the retail sector and the lowest rate of return.

Earlier, the volume of German production orders for consumer goods from domestic buyers in November 2023 fell to the level last observed in the heyday of COVID-19 (blue). Overseas orders outside the eurozone are normal (black), underscoring how big the asymmetric shock that hit Germany after pulling out of energy from Russia is.

IIF Chief Economist: Retail volume Germany in March 2023 showed another strong decline after a steady decline over the past year. This figure is much weaker than the similar figure for. USA The largest economy is clearly Europe not doing well, even though markets are focused on a US recession rather than the eurozone.

Consumption

Real estate

Main article: Real estate (German market)

Cars

Main article: Automobile market of the European Union

2023: Fifth in the world in terms of the number of cars sold - 3.2 million units

2022: Minimum age to drive - 17

2019:589 cars per 1000 people

Cars per 1,000 people (World Bank, June 2019):

• UNITED STATES: 837
• Australia: 747
• Italy: 695
• Canada: 670
• Japan: 591
• Germany: 589
• Britain: 579
• France: 569
• Malaysia: 433
• Russia: 373
• Brazil: 350
• Mexico: 297
• Saudi Arabia: 209
• Turkey: 199
• Iran: 178
• SOUTH AFRICA: 174
• China: 173
• Indonesia: 87
• Nigeria: 64
• India: 22

2018:562 cars per 1000 people

2023: Pork is the most consumed type of meat

2022: Vegetarian share increases to 6%

2021: Germany is the 6th country in the world in terms of beer consumption

2018

Per capita tea consumption per kg per year

Milk consumption in liters per year per person

2019

Pork is the most consumed type of meat

Beer consumption in liters per year per person

Business

2024: The number of company bankruptcies increased by 30% to 11 thousand.

In the first half of 2024, the number of company bankruptcies in Germany reached approximately 11 thousand. This is almost 30% more compared to the same period in 2023 (8470 cases) and is the highest value in almost ten years. Such figures are given in the review of the German credit institution Creditreform, published on June 24, 2024.

According to the Federal Statistical Office of Germany, during January-March 2024, 5,209 corporate bankruptcies were registered in the country. This is 26.5% more compared to the first quarter of 2023 and 11.2% higher compared to the same period in 2020, when the pandemic had a negative impact on the business sector. In COVID-19 May 2024, the number of bankruptcies in Germany jumped by 25.9% on an annualized basis. By the end of 2024, up to 20 thousand local enterprises can declare insolvency in general, according to the published materials.

Insolvency in Germany reached its highest level in nearly a decade. In the first half of 2024, companies continue to deal with the consequences of the 2023 recession, the crisis and macroeconomic difficulties, says Patrik-Ludwig Hantzsch, head of economic research at Creditreform.

Due to the impact of COVID-19, high energy prices and rising interest rates, an increasing number of companies in Germany are facing difficulties. The highest rate of bankruptcies in the first quarter of 2024 was recorded by sectors transport and warehouse operations - 29.6 cases per 10,000 companies. In the construction industry, the figure was 23.5 cases per 10,000 enterprises, in the manufacturing industry - 20.3 cases. In general, the export-oriented German economy is experiencing serious difficulties.^[3]

2020

15,840 companies declared bankruptcy

In 2020, 15,840 companies went bankrupt in Germany. This is the lowest figure since 1993, and if we talk about a decrease in percentage terms - the sharpest reduction since 1975 (-15.5% in 2020 compared to 2019). The beginning of 2021, as well as the end of 2020, was marked by a record low number of bankruptcies, according to Coface data.

Such positive dynamics, however, is not observed in all sectors. Each company applying for state support in Germany in connection with the COVID-19 pandemic must prove to the authorities that its business model was profitable in the pre-crisis period, that is, for December 2019. Since, for example, the metallurgical industry and the German auto industry have been in recession since the end of 2018, not all enterprises operating in these sectors have managed to fulfill the criteria established by Berlin.

This led to an increase in the number of bankruptcies - in metallurgy, the indicator for 2020 increased by 7.1%, in the automotive industry - immediately by 31.6%. However, this did not greatly affect the composition of the structure of corporate bankruptcies: the metallurgical sector accounted for only 3% of the total number of bankruptcies in 2020, and the auto industry - just under 0.5%. The vast majority of bankruptcies are still in the b2b services sector, construction industry, hospitality industry, retail and transportation sector.

The German government has taken a number of measures aimed at supporting business during the crisis period. The most popular was the concessional lending program, which spent 49 billion euros (1.5% of national GDP). At first, the program was available only to medium-sized enterprises, but later, in November 2020, small ones were included in it.

At the same time, the program of economic stabilization of large companies, the main "pillars" of the German market, turned out to be almost not in demand: of the allocated limit of 600 billion euros, business requested only 8.4 billion euros, and mainly only tour operators and transport companies applied for funds, for example, carrier Lufthansa (5.4 billion euros) and tour operator TUI (1.25 billion euros).

Reduction of the number of German companies in Russia from 6.2 thousand to 4.2 thousand in 6 years

Over 6 years, by August 2020, the number of companies from Germany operating in Russia decreased by almost 2 thousand. Of the 6.2 thousand legal entities with German capital for 2014, 4.2 thousand remained by the end of 2019. German business investments in Russia have decreased to a minimum in 20 years.

2019

In which regions the largest companies in Germany were founded

Germany decided to buy up shares of German companies in order to prevent technology leakage

On February 5, 2019, it became known about Germany's plans to buy shares in German companies in order to prevent technology leakage due to the conclusion of mergers and acquisitions involving foreign business. Economy Minister Peter Altmaier believes that such a change in industrial strategy is necessary for the country's further prosperity.

It may come to    the point that the state will temporarily take shares in companies - not for nationalization and management in the long term, but to prevent the sale and export of key technologies abroad, Altmeier said at a press conference after the presentation of the "Strategy for the Development of National Industry until 2030."

The minister named the key industries for Germany: steel and aluminum, chemical industry, mechanical engineering and equipment production, optics, medical equipment, environmentally friendly technologies, defense, aerospace sector and 3D printing.

A special investment fund is planned to support key companies, including automakers, as well as ThyssenKrupp, Siemens and Deutsche Bank, Peter Altmaier said.

The German government also seeks to strengthen the country's competitiveness by tightening controls on foreign investment, especially Chinese. Authorities fear that overseas investors, by buying German businesses, are getting their innovation and destroying the manufacturing base on which most of Germany's wealth is built.

Peter Altmeier suggests that the German government needs to support the development of innovations and technologies in the country and at the same time do everything to reduce the costs of innovative business, including the cost of fulfilling state requirements in the field of ecology and social obligations.^[4]

Transport

Electric Vehicle Market

Main article: Electric vehicles (German market)

R&D

2020: R&D spending - $109.8 billion

2019: Fourth most patented in the world

At the end of April 2020, the World Intellectual Property Organization (WIPO) ranked countries by the number of new patents. In 2019, Germany accounted for 19,353 patents. Read more here.

Agriculture

2021: Share of farmland - 48%

2019: Average use of pesticides in agriculture

Tourism

2022: Reduction in the number of foreign tourists to 28 million people

2020:46 UNESCO-protected World Heritage Sites

2019: More than 45% of the population went on tourist trips. Spain is the most popular country

2018: Germany is among the top countries in terms of tourism revenue

Alcohol market

2022: 5th in the world in terms of beer production

2018: Minimum age to purchase alcoholic beverages - 16 years

Notes