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Germany is the fourth largest economy in the world after the United States, China and Japan and the largest economy in Europe. It is the third largest export nation globally: With 70% the service sector contributes the largest part to the country’s GDP.

Key economic facts dashboard




Recovery of the German economy continues

The German government has slightly increased its economic forecast for this year. It now expects gross domestic product to increase by 0.4% in 2023. In January it had still assumed 0.2%. Economic indicators such as industrial production, new orders and the business climate point to an economic revival in the further course of the year. In addition, the support and stabilization measures taken by the German government to cushion increased business costs and the loss of purchasing power by private households would have prevented a sharper slowdown in the winter half-year.

For further insights into the global growth outlook, challenges and threats, see our Global Economic Outlook. The views of more than 1,300 CEOs on future global economic development and other exciting topics such as technology, human resources and ESG are shown in our CEO Outlook.

German companies can significantly increase exports

Exports "Made in Germany" increase in the first quarter of the current year. However, there is a significant damper in March. At 129.7 billion euros, exports in March were 5.2% lower than in February of the current year, but 5.0% higher than in March 2022. The drop in exports was particularly marked in the two most important individual markets for "Made in Germany", the USA (-10.9%) and China (-9.3%).

The further outlook is also subdued. Geopolitical risks, recurring turbulence on the financial markets, continuing high inflation rates and loss of purchasing power, as well as increased interest rates are causing major uncertainty in the foreign business of German companies.

Inflation is only falling slowly

Bundesweit sind die Verbraucherpreise im April um durchschnittlich 7,2% im Vergleich zum Vorjahresmonat gestiegen. Der sehr langsame Rückgang der Inflation im April kann als ein klares Indiz gesehen werden, dass die Stabilisierung des Preisniveaus ein längerer Prozess sein wird. Insbesondere die Preise für Nahrungsmittel stiegen im Vergleich zum Vorjahresmonat mit 17,2% erneut überdurchschnittlich. Diese sind und werde auch in den kommenden Monaten der maßgebliche Treiber der Inflationsrate sein. Der Anstieg der Energiepreise lag dagegen mit einem Plus von 6,8% gegenüber dem Vorjahresmonat wie schon im März erneut klar unterhalb der Gesamt-Inflationsrate.

Weak spring recovery, but labor market remains stable

The number of unemployed in Germany fell only slightly in April due to a marked slowdown in the economic recovery in the spring. The unemployment rate stagnated and was unchanged at 5.7% in April. One of the reasons for this is the sluggish economy. Overall, however, the labor market is in stable shape.

Share of renewables continues to rise

An ever larger share of Germany's energy needs is increasingly being met by renewables, such as wind power or photovoltaics: in 2021, their share was around 41%; in 2022, their share rose to 46.2% of gross electricity consumption. By 2030, this figure is set to rise to at least 80%.

The share of renewables is therefore expected to almost double in less than ten years. The rate of expansion must even triple for this to happen. Wind power is the most important renewable energy source. Just under a quarter (24.1%) of the electricity fed into the grid in 2022 came from wind power.

Are you interested in the German market and would like to learn more about Germany as a business location? Stay up to date with our quarterly "Business in Germany" newsletter!

Watch now: Business Location Germany at the KPMG International Business Summit 2022


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