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Economic growth

Germany’s property market is experiencing the positive effects that come with a strengthening economy: Germany’s GDP grew by just 0.7% over a five-year period up to 2005, which ended abruptly in 2006 when GDP increased by 2.2%. The government had a further boost in April 2007 when it was announced that unemployment had dropped to 3.967 million, below the politically sensitive 4 million mark, with the forecasts indicating a continuing increase in employment.

Economic reforms

Chancellor Gerhard Schroeder’s government was responsible for implementing a number of reforms to overhaul the labour market and welfare system, and further policies of reform have been brought in by Chancellor Angela Merkel’s government that is currently in power. The country’s budget was stretched by the demands on its welfare system, which exceeded social security contributions. However, a series of reforms, and the positive economic activity of 2006, have allowed Germany’s budget deficit to fall back within the 3% debt limit imposed by the EU.

Industry in the east

The country’s unemployment rate is estimated to be between 7 and 10%, depending on which body is conducting the estimate. Nevertheless the majority of this unemployment can still be found in the east (where nearly 20% of working-age Germans remain outside full-time employment) and this remains perhaps the single greatest cause of social division and unrest in the country. Germany’s employment and the country’s economy as a whole have suffered from the financial burden of modernising the economy of the former East Germany; the west transferred an average of $80 billion every year to the east.

Major exporter

Germany is the world’s largest exporter by volume, with nearly a billion dollars in exports in 2006, and with a trade surplus of over $200 billion in the same year. Its major trading partners are France, the US, the UK, the Netherlands, Italy, Belgium and China, but German companies have trading links with almost every other country in the world.

The euro in Germany

The adoption of the euro in 2002 saw prices in Germany rise above the rate of inflation; however, thanks to sluggish consumer spending in recent years, inflation is not the concern in Germany that it remains in much of the rest of Europe and estimates for 2006 put the rate of inflation at around 1.7%.

Related items

Documents and Reports

	Germany property investment report (409Kb)
	Germany country guide (860Kb)
	Germany property buying guide (953Kb)
Documents and Reports

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