Economic Growth and Inflation in Germany

Economics Assignment
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Germany 1
Introduction
Primarily, the economic growth of Germany is progressive and enviable by most
economies. Due to the increased employment levels over the recent past owing to the growth of
the service, manufacturing and agriculture sectors. Also, the implementation of reduced
unemployment benefits has, in turn, encourage more employment initiatives. Similar to other
countries, Germany has experienced structural, frictional and cyclical forms of unemployment
over the respective years. Alongside unemployment, Germany has shown signs of hyperinflation,
creeping, walking and galloping types of inflation which have been caused by demand –pull
factors and cost-push factors..Also, the appreciation of the Euro has helped stabilize the prices of
services and commodities hence reducing the rate of inflation.
Worth noting, the German economy is considered powerful in the Europe region with an
estimated export value of 1.547 trillion US dollars in the years 2018(Workman, 2019).
Particularly, machinery, automotive, electrical equipment and machinery, optical, technical and
medical apparatus plus pharmaceuticals form the top five list of Germany s’s exports (Workman,
2018). On the importation front, Germany ‘s value of imports in the year 2018 amounted to
1.287 trillion US dollars thus goes to show Germany exports more than it imports. Namely,
Germany imports Machinery, electrical machinery and equipment, vehicles, mineral fuels and
pharmaceuticals as its top five goods (Wits, 2008). Notably, among Germany’s biggest
companies are the Volkswagen Group and Merck KgaA.

Germany 2
GDP Constant price
Notably, the GDP (constant price) rate grew between the years 2008 and 2011 but later
declined in 2012.Remarkably, 2012 to 2013 saw a growth in the Gross Domestic product due to
better economic conditions .However, there was an economic downturn from the year 2014 to
2014 which later grew in the year 2015 as shown in the figure below. The year 2015 experienced
a growth towards the year 2017.It can be said that the GDP (constant price) rate of growth has
improved over the years. Due to the increase in investment opportunities, demand and supply of
goods and services, the economic outcomes of the German economy are steadily growing hence
the assertion that the wellbeing of the German economy is on the right track Overall, GDP
growth rate in Germany is among the top growing global economies.
(Trading Economics, 2019) .Retrieved from https://tradingeconomics.com/germany/gdp

Germany 3
Real Annual GDP growth Rate
Primarily, Real Gross domestic growth implies the annual rate of growth of the GDP using
domestic currency at the market price. Currently, the real GDP growth for the year 2018 was 1.9
percent. Despite the fluctuation, Germany ‘s economy is among the top five countries with a
steady economic growth pattern since the year 2009(OECD,2018). However, there was an
increase between the years 2000-18 estimated at 1.9 percent (Knoema, 2019).Worth noting,the
German economy grew by 2.01 % between 1971 and 2018.As illustrated in the below graph,the
German economy declined between the years 2007 -09.This was due to the effects of the 2007-
09 global financial crisis.However since the year 2009 and early 2011,the economy grew
significantly.There was stagnanted decline in economy growth between the year 2012-13.The
year 2014 experienced a slight growth and decline which extended to the year 2016 when the
economy began to grow steadily till the year 2018.Overall,the German annual GDP keeps
growing.