Economic Situation in Germany
German Economy from Crisis to Boom: A
Model for Recovery?
October 18 -21, 2010
Bangkok, Thailand
Oliver Wieck
Managing Director
Department for International Trade and Development
Economic Situation in Germany
 Germany is experiencing a remarkable rebound in 2010. GDP will
see an estimated 3.5% growth rate.
 World economy is still amidst an upswing, but growth dynamics
have slightly lost momentum. Emerging economies are showing
high growth rates. USA and Eurozone (excluding Germany)
however, with somewhat muted growth rates and growth
perspectives.
 Germany is reaping benefits from positive global economic climate.
Exports have soared significantly; but domestic demand as well is
kicking in at a stronger pace. Stable labor market is fueling private
consumption, capital goods spending is picking up.
 Risks are still virulent, but have proved to be manageable.
Structural problems among European countries remain major task
to be addressed to avoid further frictions between member states.
2
Export of (Industrial) Goods
Driving force Germany‘s Growth
 Germany represents just 1% of the world‘s population
but accounts for 8 % of global export volume
 Among „green technologies“ the share is even higher (16%)
 German exports have doubled between 1999 and 2009
 Foreign sales account for ¾ of DAX-30-Companies‘ turnover,
for some German „Mittelstand“ companies the share is 90%
 Almost 50% of German GDP is earned abroad
 Export was responsible for Germany‘s high pre-crisis growth rates
and has contributed to the reduction of unemployment
3
German Exports
Changes in exports with selected trading partners Jan-Jun 2010
as compared to Jan-Jun 2009
90
France
Jan-Jul 2010
as compared to
Jan-Jul 2009
+ 18.3%
85
USA
United Kingdom
10.2%
14.1%
13.2%
80
China
Spain
75
Czech Republic
70
55.5%
15.1%
17.2%
T urkey
Japan
38.8%
24.3%
65
Brazil
61.3%
South Korea
60
2008
2009
2010
India
37.9%
21.1%
Source: Federal Statistical Office, German Central Bank
4
Emerging Markets continue to grow
Emerging Markets continue to grow
Real GDP, y-o-y-change in %
2009
2010
2011
10,5
9,7
9,6
9,1
8,4
7,5
5,7
4,0 4,3
3,3
2,8
2,6 2,3
2,0
1,7 1,5
4,1
1,5
-0,2
-2,6
-4,1
-4,7
-5,2
-7,9
Eurozone
Germany
USA
Japan
Russia
China
India
Brazil
5
Source: IMF, World Economic Outlook October 2010
Pre-crisis Level has not been reached yet
Industry's remarkable recovery
Production index of manufacturing industry, (2005=100), seasonally adjusted
Production index of manufacturing industry, (2005=100), seasonally adjusted
130
130
Highest
level
- 24.3%
110
117.0
Current
Status
100
90
Lowest level
Status acc. to
BDI
Economic
Report 04/09
88.6
80
Status acc. to
BDI
Economic
Report 01/10
120
Highest
level
+ 60.4%
- 37.7%
125.6
110
Current
Status
111.1
100
106.5
90
96.8
Status acc. to
BDI
Economic
Report 04/09
80
94.6
70
60
Status acc. to
BDI
Economic
Report 01/10
94.3
Lowest
level
70
Remaining difference
in production
120
Remaining difference
in production
+ 32.1%
91.7
78.3
60
February 2008
April 2009
August 2009
November 2009
August 2010
November 2007 February 2009
August 2009
November 2009
August 2010
Source: Federal Statistical Office
6
Germany as a Model for Recovery?
 As an export nation Germany was one of the countries hardest hit
by the crisis
 The crisis was used by companies to further enhance their own
competitiveness
 Policy-makers have taken the right steps: debt reduction before the
crisis, during the crisis: short-time work, scrapping premiums,
economic stimulus programmes
 State support is now running out, consolidation is coming to the
forefront
 Companies are now benefiting from the worldwide upswing with
innovative products, „green technology“, flexibility of SMEs
 However: all the homework has not yet been done, additional
challenges
7
Challenge: Demographic Change
World Population, billion inhabitants
Population Germany, million inhabitants
10
84
9
82
8
80
78
7
76
6
74
5
72
4
70
3
68
2
66
1
64
0
62
1950
1960
1970
1980
1990
2000
2010
2020
2030
2040
2050
2010
2020
2030
2040
2050
2060
Share in %
100
North
America
Nordamerika
5,1
4,8
Europe
Europa
Latin
Lateinamerika
America
Africa
Afrika
Asia
Asien
90
25,6
80
11,0
70
7,2
36,8
38,3
40,5
44,4
43,9
15,4
15,6
2050
2060
60 Jahre und ält er
52,2
60
46,5
45,7
50
8,6
8,4
40,2
55,4
40
20 bis unter 60 Jahre
30
14,5
21,7
20
60,4
57,3
10
19,0
17,0
16,7
16,0
Unter 20 Jahre
0
2008
Source: UN, IW
30,7
2020
2030
2040
Source: Federal Statistical Office
8
BDI – Proposal to boost Growth

Strengthen Social Market Economy and principle of
sustainability

Enhance Europe’s competitiveness

Bolster up capacity for innovation, enhance education

Stabilize financial markets, safeguard business funding

Stop protectionism, intensify free trade

Expand infrastructure, realize sustainable mobility

Unite growth, competitiveness and climate protection

Realize comprehensive energy-strategy

Make digital information society come true
9
Thank you!