INTERNATIONAL ECONOMICS
INTERNATIONAL TRADE ANALYSIS- (2006-2016)
FROM:
VIPUL KOUL-(2332)
SAIF RAB-(2323)
BATCH- 2016-19
DIARY ENTRY
NAME DATE TIME ALLOTED CONTRIBUTION
SAIF RAB 2nd DEC 1 hour Selection of country
5th DEC 2 hour Research
9th DEC 2 hours Study of research papers
11th DEC 3 hours Working on the assignment
13th DEC 3 hour Conclusion
2nd DEC 1 hour Selection of country
5th DEC 2 hours Research
9th DEC 2 hours Study of research papers
VIPUL KOUL 11th DEC 3 hours Working on the assignment
13th DEC 3 hours Conclusion
2nd DEC 1 hour Selection of country
5thDEC 2 hours Research
9th DEC 2 hour Searching of research papers
11th DEC 3 hour Working on the assignment
13th DEC 3 hour Conclusion
GDP of Germany
The GDP or the gross domestic product of a country is the total value of everything produced by all the people and companies in the country. It is used as a measure of welfare of the country the GDP of Germany over the past 10 years shows fluctuations in value as it is controlled by the economic factors impaction the country
Germany: distribution of gross domestic product (GDP) across economic sectors from 2006 to 2016
In the year 2006 Germany started out with majority of its GDP coming from the service sector accounting for 45% of it. Over the course of 10 years we can find that there is a steady increase in its service sector and its net increase being about 7% this is because of the improved growth prospects were triggered by an increase in investment, which also constituted an increase in demand and Germany has one of the most labor productivity levels in the world. A reduction in savings and greater German consumption followed because of the improved growth prospects. The industrial sector of Germany started off with 34% in 2006 but faced a decline in the 10 years to follow finishing at 28% in 2016. This was due to the shift of government focus to the service sector and also the great recession which took place in 2009 from which the sector has not recovered from today. The smallest contributor to the GDP of Germany was the agricultural sector, it was also the most erratic sector which faced either increase or decrease due to different reasons. This sector too faced a decline in 2009 due to the recession but managed to bounce back the following year due to the government policies in place for the protection of this industry.
Germany per capita income
As we can see that Germany oversaw a growth in all of its years except for one which is 2009. In 2009 they faced a huge decline in per capita which fell from 42,365 to 40,086, GDP contracting over 6.8% but the recession was short-lived and the economy recovered strongly by the first quarter of 2011, GDP was back to its pre-recession levels before 2009. After that the per capita income rose tremendously to 44,125 in 2011 and finished at 45,551 in 2016. This rise is due to the Low interest rates, falling unemployment, a relatively weak exchange rate and strong foreign demand should feed an increasingly self-sustained recovery, all of these factors contributed to the overall growth from its initial value in 2006 to its value in 2016.
Stages of development
When we compare and see the per capita and the sectorial contribution to the GDP we can find that there is indeed a direct relationship between the sectors and the per capita income. As we can see in 2009 where there was a decline in the total GDP and the per capita income there was a decline in the service sector and the manufacturing sector as well with the agricultural sector almost staying the same. This shows that there is indeed a relationship between the welfare and the sector of focus. i.e counties with a higher per capita income are more focused on the services and the manufacturing sector.
Balance of payments
Indicator Import (US$ Thousand) Export (US$ Thousand) Balance of Payment
2006 922213393 1121962887 199749494
2007 1059307813 1328841354 269533541
2008 1204209307 1466137413 261928106
2009 938363080 1127839933 189476853
2010 1066816752 1271096329 204279577
2011 1260297537 1482202274 221904737
2012 1161213213 1410129633 248916420
2013 1187314564 1450950921 263636357
2014 1214955667 1498157778 283202111
2015 1057616386 1328549134 270932748
2016 1060672017 1340752046 280080029
The balance of payments is a statement of all transactions made between different people or entities in one country and the rest of the world over a defined period of time, such as a quarter or a year. It shows the value of goods a country interacted with on the scale of the world
From the above we can see that Germany has had a surplus balance of payment which means that their exports are always more than the exports, this is primarily due to Germanys already well-established manufacturing and services sector. There is only one year where the BOP has reduced this is in 2009 and was the result of the recession which had taken place, both imports and exports had diminished due to reduced consumer spending and price inflations. . Overall when we see the net change in the course of 10 years we find that there was an increase of balance of payment by over 3.5% even though the imports increased the BOP did not decline because the imports too had grown constantly.
MAJOR GOODS EXPORTS (US$ Thousands)
COMMODITIES RANK-WISE NO 1 NO 2 NO 3 NO 4 NO 5
YEAR – – – – –
2006 Automobiles with reciprocating piston engine di
41,695,835 Automobiles with diesel engine displacing more
30,267,168.00 Automobiles with reciprocating piston engine di
30,220,434.00 Other medicaments of mixed or unmixed products,
28,608,964.00 Aircraft nes of an unladen weight exceeding 15,
17,318,485.00
2008 Automobiles with diesel engine displacing more
46,512,757.00 Other medicaments of mixed or unmixed products,
39,976,219.00 Automobiles with reciprocating piston engine di
39,940,116.00 Automobiles with reciprocating piston engine di
29,359,500.00
Petroleum oils, etc, (excl. crude); preparation
23,128,423.00
2010 Automobiles with reciprocating piston engine di
44,618,829.62 Automobiles with diesel engine displacing more
40,395,149.66 Other medicaments of mixed or unmixed products
37,031,165.67 Automobiles with reciprocating piston engine di
22,402,420.37
Aircraft nes of an unladen weight exceeding 15
22,108,754.2
2012 Automobiles with reciprocating piston engine di
49,548,742.14
Automobiles with diesel engine displacing more
47,650,385.78 Other medicaments of mixed or unmixed products,
36,938,185.23 Aircraft nes of an unladen weight exceeding 15,
32,849,891.92 Automobiles with reciprocating piston engine di
25,609,966.31
2014 Automobiles with reciprocating piston engine di
55,111,322.80
Automobiles with diesel engine displacing more
50,154,539.62 Other medicaments of mixed or unmixed products,
39,609,973.07
Aircraft nes of an unladen weight exceeding 15,
33,035,950.30 Automobiles with reciprocating piston engine di
23,651,350.93
2016 Automobiles with reciprocating piston engine di
56,842,064.28
Automobiles with diesel engine displacing more
45,646,385.41 Other medicaments of mixed or unmixed products
, 37,467,192.58 Aircraft nes of an unladen weight exceeding 15
33,792,523.78
Antisera and other blood fractions
21,675,275.13
Analysis
The main commodity Germany exported was Automobiles which accounted to more then 13% of the overall exports. Under Automobiles Germany would export pistol diesel and pistol engines. Overall the number one good Germany was exporting was the pistol engine automobile which was the number one most exported for all the years except for 2008 during which the prices for petroleum soared and people would prefer to buy cars which are diesel basses as they were most economical to maintain. Apart from the automobile goods Germany exported other medicaments of mixed and unmixed products such as oils. Due there strong industrial sector another one of there main exports was also aircrafts.
MAJOR GOODS IMPORTS (US$ Thousands)
COMMODITIES RANK-WISE NO 1 NO 2 NO 3 NO 4 NO 5
YEAR – – – – –
2006 Petroleum oils and oils obtained from bituminous
52,181,798.00 Natural gas in gaseous state
30,760,672.00 Petroleum oils, etc, (excl. crude); preparation
18,948,754.00 Aircraft nes of an unladen weight exceeding 15,
14,504,696.00 Parts and accessories of automatic data process
14,357,037.00
2008 Petroleum oils and oils obtained from bituminous
79,124,125.00 Natural gas in gaseous state
42,041,721.00 Petroleum oils, etc, (excl. crude); preparation
27,762,382.00 Other medicaments of mixed or unmixed products,
16,155,022.0 Automobiles with diesel engine displacing more
13,104,127.00
2010 Petroleum oils and oils obtained from bituminous
52,596,804.85 Natural gas in gaseous state
31,206,980.29 Petroleum oils, etc, (excl. crude); preparation
25,993,173.10 Other medicaments of mixed or unmixed products
18,514,857.29 Photosensitive semiconductor devices,photovolta
16,026,741.36
2012 Petroleum oils and oils obtained from bituminous
76,777,409.74
Natural gas in gaseous state
40,405,841.50 Petroleum oils, etc, (excl. crude); preparation
34,078,887.31
Other medicaments of mixed or unmixed products,
21,621,465.29 Automobiles with diesel engine displacing more
15,924,265.75
2014 Petroleum oils and oils obtained from bituminous
65,738,968.81 Natural gas in gaseous state
35,900,621.15 Petroleum oils, etc, (excl. crude); preparation
32,967,721.39 Other medicaments of mixed or unmixed products,
22,726,309.51 Aircraft nes of an unladen weight exceeding 15,
19,319,678.78
2016 Petroleum oils and oils obtained from bituminous
28,718,516.66
Other medicaments of mixed or unmixed products
22,471,693.73
Natural gas in gaseous state
22,456,507.48 Automobiles with diesel engine displacing more
18,093,097.99 Antisera and other blood fractions
17,084,308.12
Analysis
Germany is the third largest importer economy in the world. The main commodity it imports is Petroleum oils and oils obtained from bituminous . There is a sharp dip in the prices of Petroleum and oil in the world market and hence Germany were able to import it for a nominal price and take advantage of this and hence were able to meet there demands by spending such little. Another commodity imported by the German market is natural house gases, these gases are imported as the country is not very rich in these gases and intern uses them for agricultural and other goods. The other goods Germany import such as Automobiles with diesel other medicaments of mixed or unmixed products are used not only to meet the increasing demand within the country but are also exported out
Major trading partners (exports)
Year Europe & Central Asia East Asia & Pacific France Netherlands North America
2006 648864726 137379509 78032709 76303973 66818502
2007 762128986 152720157 88900117 88335346 67281723
2008 815498084 168065669 97785667 96192563 71881031
2009 667112649 142342189 75882124 80923432 59793635
2010 739085254.4 182227323 81804227.44 91099288.75 64989933.32
2011 876962502 204600153.2 92181814.74 114117815.7 76129908.25
2012 808067980.1 185273517.7 81826805.41 110213481.1 72690651.33
2013 840866325.2 181370077.9 84298238.9 117764285.1 72013381.12
2014 864462326.8 190004238.8 88656051.18 116719333.3 71561447.59
2015 731073266.1 178947200.6 74158393.52 97476691.94 72550995.41
2016 734209756.1 183808322.5 72916931.16 92488677.85 70405560.55
The main exporters of German products are Europe and central Asia, within central Asia China is one of their important dealers along with the UK in Europe. In North America Germanys main importer is the United States of America. As we can see there was a steady net increase in the amount imported to all places except for France who faced around 1.8% decline in German products. When we see in terms of singular country France is the highest importer of German goods followed by the Dutch.
Major trading partners (Import)
Year Europe & Central Asia North America France United States East Asia & Pacific
2006 828485983 106725926 106705583 98010962 95202185
2007 1004135958 109806234 128665995 100560788 108265602
2008 1074323385 112365303 140163399 103310421 118970261
2009 830580147 82295077 114262366 75017390 111989057
2010 907634719.2 96822066.29 120169040.7 86847476.32 144994314.9
2011 1052804873 113511446.1 141249655.8 103075150.9 177497850.3
2012 969166120.1 123859739.7 131638089.1 112268668.2 176581420
2013 995254796.2 130740999.7 131788927.6 118864340.4 181982435.4
2014 1018852908 139401127.8 133560646.1 127770823.1 193589467.3
2015 895926835.1 138141623.6 113948629.9 126565881.8 162290367.2
2016 905897964.9 129235919.5 110669303.6 118604735.1 171522950.4
The main importers of German products are Europe and central Asia, with china again being one of the main countries of trade. In North America Germanys main exporter to Germany is the United States of America. As we can see there was a steady net increase in the value of goods imported from Germany especially in East Asia and pacific who deal in oil and petroleum. When we see in terms of singular country again France is the highest exporter of goods to Germany.
Conclusion
The German economy – the fifth largest economy in the world in PPP terms and Europe's largest – is a leading exporter of machinery, vehicles, chemicals, and household equipment and benefits from a highly skilled labor force.
Reforms launched by the government of Chancellor Gerhard SCHROEDER (1998-2005), deemed necessary to address chronically high unemployment and low average growth, contributed to strong growth and falling unemployment. These advances, as well as a government subsidized, reduced working hour scheme, help explain the relatively modest increase in unemployment during the 2008-09 recession – the deepest since World War II. The new German Government introduced a minimum wage of about $11.60 (8.50 euros) per hour that took effect in 2015.
Stimulus and stabilization efforts initiated in 2008 and 2009 and tax cuts introduced in Chancellor Angela MERKEL's second term increased Germany's total budget deficit – including federal, state, and municipal – to 4.1% in 2010, but slower spending and higher tax revenues reduced the deficit to 0.8% in 2011 and in 2015 Germany reached a budget surplus of 0.9%. A constitutional amendment approved in 2009 limits the federal government to structural deficits of no more than 0.35% of GDP per annum as of 2016, though the target was already reached in 2012.
The future
The German economy suffers from low levels of investment, and a government plan to invest 15 billion euros during 2016-18, largely in infrastructure, is intended to spur needed private investment. Following the March 2011 Fukushima nuclear disaster, Chancellor Angela MERKEL announced in May 2011 that eight of the country's 17 nuclear reactors would be shut down immediately and the remaining plants would close by 2022. Germany plans to replace nuclear power largely with renewable energy, which accounted for 27.8% of gross electricity consumption in 2014, up from 9% in 2000. Before the shutdown of the eight reactors, Germany relied on nuclear power for 23% of its electricity generating capacity and 46% of its base-load electricity production. Domestic consumption, bolstered by low energy prices and a weak euro, are likely to drive German GDP growth again in 2016..
BIBLOGRAPHY
https://wits.worldbank.org/CountryProfile/en/Country/SWE/Year/2016/Summaryhttps://wits.worldbank.org/CountryProfile/en/Country/SWE/Year/2016/Summary
https://wits.worldbank.org/CountryProfile/en/DEU
https://www.ft.com/content/5f7542a3-8dcb-3de4-8832-9879d69b71ad
https://tradingeconomics.com/germany/current-account-balance-bop-us-dollar-wb-data.html
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