GERMANY / SALARY

Introduction

Germany is a country found in the west of Europe. It is highly characterized by rivers, forests, sea beaches, and mountain ranges. Germany's capital city is Berlin. The country has a strong social-economic model economy. Germany is the most powerful economic country in Europe and is also ranked as number four globally in terms of the nominal GDP.

The high economic growth is achieved by its various sectors, including service, industry, and agriculture sectors. Germany uses the Euro currency when transacting. The article will help you learn about Germany's economy and some of the industries which have led to its massive economic growth.

GDP

Germany's nominal GDP in 2021 is around $ 4.32 trillion and $ 4.74 for the purchasing power parity. Germany is ranked as the 4th largest for nominal GDP and number five for PPP. The GDP has been rising over the years. In the year 2018, the rise was by 1.3 percent, in 2019 by 0.6 percent; however, during the year 2020, there was a massive drop of 6 percent due to the Covid 19 pandemic.

The GDP per capita is 51,967 and $57,081 for nominal and PPP, thus giving Germany a ranking of number 15 globally for both GDPs. The GDP for the various economic sectors is as follows.

·       0.7 % for the Agricultural sector

·       30.7% for the industry sector

·       68.6% for the Service sector

The GDP for various components for the year 2017 were as follows

·       53.1% for household consumption

·       19.5% for government consumption

·       20.4% for investment in fixed capital

·       -0.5% for investment in inventories

·       47.3% for export of goods and services

·       37.8 % for imports of goods and services

Economic sector

The main sectors which have led to an increase in Germany economy include

·       Primary

The primary sector comprises forestry, mining, and agriculture. The primary industry has led to the employment of about 2.4 percent of the population. Germany's agricultural sector is massive thus has been able to produce 90 percent of their nutrition needs. Almost a third of Germany is covered with forest, making it an importer of wood products.

We also have mining which has helped raise Germany's economy. Some minerals available include lignite, fluorspar, graphite, lime, boron, and potash salt. With the high production, Germany can use them at home and still export to other countries.

·       Technology

Germany is one of the leading countries in terms of technology where they specialize in green technology. The technology aims at producing environmentally friendly items. Germany main focus for green economy includes

·       Waste management and recycling

·       Sustainable water management

·       Material efficiency

·       Power generation

The achievements from the technology sector have been massive, thus boosting the country's economy.

·       Services

The service sector has led to the employment of 74.3 percent for the year 2017. Services constitute 68.6 percent of Germany's GDP. Germany is among the most visited countries, and also most Germans spend their vacation in the country thus making the dire need of hotels and restaurants. Tourism and domestic travel contribute to around EUR 43.2 million of German GDP. Various sectors have led to an increase in German GDP as follows.

·       Transport, trade, hotel, and restaurants 18%

·       Financial business and Renting activities 30.5%

·       Other service activities 21.7%

·       Industry

Germany is famous for the production of chemicals, electrical equipment, and Machinery. In 2017 industries contributed to 30.7 % of Germany's GDP and also led to the employment of 24.2%. Germany is the fourth-largest exporter of auto automobiles. A significant part of Germany's economy is due to technology SMEs, which are mostly family-owned.

Employment Sector

1.    Employment

Germany's employment as of August 2020 stood at 42.3 million, making the employment rate 68.3 percent. The most common jobs in Germany include health care workers, economists, production assistants, software developers and programmers, and sales representatives. The allocation of the labor force for the various economic sectors is as shown below

·       1.4% for the Agriculture sector.

·       24.2% for Industry sector

·       74.3% for the service sector.

Germany's average gross salary for full-time employees in 2019 stood at $4,450 monthly, which is equal to EUR 4,012.

2.    Unemployment.

The unemployment rate in Germany has gradually reduced over the years. In 2017 the unemployment rate was 5.7%, in 2018, 5.2%, and in 2019 5 percent. However, in 2020, there was a slight increase in the unemployment rate due to the Covid 19 pandemic. In the year 2020, the unemployment rate was 5.9 percent.

Exports and Imports

In 2019 German exports amounted to $ 2.004 trillion. The main export partners of Germany include the United Kingdom, Netherlands, China, France, United States, and Italy. Germany Trade statistics show that the goods and services imported by Germany account for 46.89 % of Germany's GDP. The main exports of Germany include

·       Foodstuffs

·       Textile

·       Pharmaceuticals

·       Rubber and plastic products

·       Machinery

·       Motor vehicle

·       Computer and electronic products

In 2019, Germany's imports were $ 1.804 trillion. The primary imported goods include Agricultural products, foodstuffs, data processing equipment, pharmaceuticals, transport equipment, and Machinery. Germany trade statistics show that the goods and services that Germany imports account for 41.10 percent of its GDP.

Inflation

The inflation CPI of Germany has gradually decreased over the years. Inflation CPI represents the average weighted market of services and consumer goods purchased by households. The world outlook database shows that in 2018 the inflation was 2%, the year 2019 1.3%, and the year 2020 0.5 percent. As of August 2021, Germany recorded the highest inflation rate, which was 3.9 percent. The main reasons for the high inflation included

·       Reduction of the prices of petroleum products

·       Temporarily reduction of the Value Added Tax

·       Marked price increases

Conclusion

Germany is ranked as the fourth largest globally in nominal GDP and uses the highly developed social market economy. Some of the main sectors which have led to the high economic growth include chemical, Machinery, motor vehicles, food and beverage, Textiles and automobiles industries. The sectors have led to massive jobs creations, thus lowering the unemployment rate. The economic sectors have also led to Germany becoming a major exporter. We also find that Germany is the largest manufacturing economy in Europe.