Germany’s GDP Comeback

“The city of Heidelberg lies in Baden-Wurttemberg on the River Neckar. A Roman fortress and settlement in the area was abandoned in A.D. 260. A new settlement began in the 5th century and came to be called Bergheim. Monastic estates were set up in the area over subsequent centuries. By 1196, the first reference to Heidelberg is recorded; this is considered the founding date of the city. The University of Heidelberg – Germany’s oldest – was established in 1386.” (CIA)

I love history, so I will be adding a little bit here just to keep it interesting and give a more well-rounded view of Germany. I had no idea we could get information from the US CIA, so I’ll probably be gleaning from them in future posts. They have all kinds of information, so you may want to check them out for your posts, too.

Germany is ranked 6th in the world for Purchasing Power Parity (PPP) which is its  ability to use its GDP of $ 2,940,000,000,000. The USA is ranked second in the world with $ 14,660,000,000,000 and the European Union is first at $ 14,820,000,000,000 (all using 2010 est.).  (CIA)

In order to understand the realistic meaning of the above figures, we need to have PPP defined. The CIA defines it as:

A nation’s GDP at purchasing power parity (PPP) exchange rates is the sum value of all goods and services produced in the country valued at prices prevailing in the United States (emphasis mine). This is the measure most economists prefer when looking at per-capita welfare and when comparing living conditions or use of resources across countries. The measure is difficult to compute, as a US dollar value has to be assigned to all goods and services in the country regardless of whether these goods and services have a direct equivalent in the United States (for example, the value of an ox-cart or non-US military equipment). (CIA)

Germany is the largest of the Eurozone countries and has become the leader by showing fiscal responsibility and come backs from financial stress. When Lehman Brothers folded in 2008, the demand for Germany’s engineering exports declined sharply and their GDP headed south. Although it was able to shift some of those exports to Chinese firms, most of the 3.5% growth last year came, however, from the investment in machinery and other capital investments.

Another reason for their growth was the fact that German citizens holding jobs rose to 40.5 million in 2010 and their income base rose as well, although more are saving than previously.  (Financial Times)

The projected growth rates of Germany’s GDP compared with that of the USA is shown in the following table:

GDP (PPP) per capita list (In international dollars)
Country 2011 2012 2013 2014 2015 2016
 Germany  $ 37,428.52  $ 38,815.32  $ 40,133.75  $ 41,530.74  $ 42,917.77  $ 44,364.83
 United States  $ 48,665.81  $ 48,665.81  $ 51,810.46  $ 53,499.31  $ 55,361.15  $ 55,361.15

 

All of the figures shown are calculated by the International Monetary Fund, and are in international dollars(Wikipedia).

Sources:

CIA World Fact Book, https://www.cia.gov/library/publications/the-world-factbook/geos/gm.html

Financial Times (London, England), Thursday, January 13, 2011 Author: Atkins, Ralph; Peel, Quentin

Wikipedia  http://en.wikipedia.org

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