Essay Sample on German Economy

Introduction

Germany is a European nation that is located in west-central Europe and has its boundaries from the Alps, across the European plane in the north to the Baltic Sea and the North Sea. The nation had a population of 82.79 million people as of 2017 and a population per capita of 237 people per square kilometer. Germany borders Switzerland and Austria to the south with mountainous terrain in the south (Central Intelligence Agency. 2014). Besides, Germany shares boundaries with France, Belgium, Poland, The Netherlands, Denmark, Luxembourg and the Czech Republic (Central Intelligence Agency. 2014). Plateaus and forests dominate the country central and northern areas with the Rhine, Danube and the Elbe rivers crisscrossing across the national territories. Germany was founded through the unification of multiple nation-states on 18th January 1871 except Switzerland and Austria which borders the country to the south (Central Intelligence Agency. 2014). However, it was until 1990 that Germany was reunited and 3rd October is celebrated as the anniversary of German reunification after a complete reunification. Germany is a democratic and federal multiparty republic with two legislative houses with Berlin as its primary business city center in Germany (Central Intelligence Agency. 2014). The current leader is Angela Merkel who has been the chancellor of the nation in 2005 as the first female leader of the country (Central Intelligence Agency. 2014).

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Business Practices

Germany central location in Europe and the presence of navigable rivers, as well as its sea border, make it a business center and one of the leading economies in Europe. German is the official business language with a majority of the population using the language or its dialects (Central Intelligence Agency. 2014). In Germany, there is a literacy rate of 99% which has significantly contributed to its robust development (Penn State University. 2014). In Germany, the working hours are very flexible, and under the labor law, the allowed working time is eight hours per day and forty-eight hours per week. In Germany, Saturday is considered a typical working day, but in a five day week, the labor laws permit 40 hours working time (Weiss & Schmidt, 2008). Sundays and national holidays are non-working days in Germany with any overtime being compensated with additional time off. Employees are entitled to a 30 minutes lunch break when working between 6 to eight working hours a day and 45 minutes when working more than the stipulated time (Weiss & Schmidt, 2008). The breaks can be split in the entire day, but they are not required to be less than 15 minutes with statutory breaks between the shifts (Weiss & Schmidt, 2008). Germany time zone is central European time which is used as its standard time, and it is located in GMT+1 time zone. Germany uses the Euro as its currency and against the dollar 1 EUR = 1.14 dollars.

Economic Situation

Germany has the largest economy in Europe and the fourth largest regarding the nominal gross domestic product in the world. In 2019, the economy is predicted to expand by 1.6%, and in 2017 the population was 82.7 million while the economy grew in 2017 by 2.2% (FocusEconomics. 2018). Germany is dominated by manufacturing industries for chemicals, metals such as steel and iron, automotive industries, ships, coal, electrical equipment and pharmaceuticals (OEC. n.d.). The country GDP is $4.0 trillion by PPP and $3.5 by nominal GDP with recorded positive growth. In Germany, the average household income per capita is $33,652 a year which is considered higher than the OECD average of 30, 563 per annum (OEC. n.d.). However, the gap between the rich and the poor is huge in Germany with only 20% of the population four times as much as the lowest 20% earners. The main country source of income is industrial exports, and the automotive industry is the leading industry with the country being one of the three leading automotive countries in the world after Japan and the United States (OEC. n.d.). Regarding exports, Germany is the 3rd largest export economy, and according to 2016 statistics Germany exported $1.25 trillion worth of goods and imported $973 billion (OEC. n.d.).Germany has a positive trade balance which means that it exports more goods worth compared to the imports. The largest German export include; cars ($154B), vehicle parts ($58.1B), medical equipment ($50.5B), planes ($34.1B), and human blood ($17.8B) (OEC. n.d.). The largest import are cars ($52.3B), vehicle parts ($37.6B), packaged medicaments ($25.2B), computers ($25.2B) and crude petroleum ($22.9B) according to 2016 statistics (OEC. n.d.). The largest export destinations for Germany include; USA ($113B), France ($99B), UK ($88B), and The Netherlands ($72.3B). Regarding imports, Germany outsources most of her imports from China ($99B), the Netherlands ($79.8B), France ($70.1B), USA ($60.2B), and Italy ($52.6B). From 2017 to 2018 by 3.6% with purchases from the European Union increasing by 3.1%. Besides, imports from countries out of EU grew by 4.3% (OEC. n.d.).

References

Central Intelligence Agency. (2014).The world factbook 2014-15. Washington, United States. (2014). Retrieved from https://books.google.co.ke/books?id=kskkBgAAQBAJ&printsec=frontcover&dq=germany+country+history+and+leadership&hl=en&sa=X&ved=0ahUKEwi8ge-Qi4bgAhULXRoKHXRYAt4Q6AEIWTAJ#v=onepage&q=germany&f=false

FocusEconomics. (2018 December 20). Germany Economy - GDP, Inflation, CPI and Interest Rate. Retrieved from https://www.focus-economics.com/countries/germany

OEC. (n.d.). Germany. Accessed on 24 January 2019. Retrieved from https://atlas.media.mit.edu/en/profile/country/deu/

Penn State University. (2014, March 31). General level of illiteracy in Germany and France. Retrieved January 24, 2019, from https://sites.psu.edu/bohemians/2014/03/31/illiteracy-level-of-germany-and-france/

Weiss, M., & Schmidt, M. (2008). Labour law and industrial relations in Germany. Alphen aan den Rijn: Kluwer Law International. p. 98-108 Retrieved from https://books.google.co.ke/books?id=OJRH8xFpZQcC&pg=PA100&dq=germany+working+hours+and+breaks&hl=en&sa=X&ved=0ahUKEwir2eCejYbgAhWNzIUKHRWDAZcQ6AEIMjAC#v=onepage&q=germany%20working%20hours%20and%20breaks&f=false