2020 saw the German GDP enter a slump in the midst of the worldwide Coronavirus crisis. After a historic 9.7% drop in GDP in the second quarter of 2020, the German economy slowly recovered with an 8.5% positive jump over the summer, but that progress was snuffed out due to a second coronavirus wave and another lockdown imposed at the end of the year. While Germany saw no further losses, its GDP effectively stagnated after accounting for inflation and other variables.
Global demand for products fell sharply in 2020 as well. Germany’s export-oriented economy experienced what was the largest decline in import and export volumes yet since the financial crisis in 2009, only trading €1.2 trillion in exports and €1.0 trillion in imports, which translated to 9.3% and 7.1% dip respectively, compared to the previous year.
The decline in trading volumes was driven by both reduced demand as well as disruption to global supply chains owing to the pandemic and to geopolitical developments, such as Brexit.
2021 has proven itself to be somewhat of a rollercoaster for the German economy, peppered with constant ups and downs and the corresponding alterations in expectations by the government.
The German economy is well on its way to bouncing back, however, as unemployment fell by 91,000 in July, reducing the total unemployment rate to 5.7%. This is thanks to Germany’s export sector jumping back into full gear, as global demands for German goods and services bounces back following the end of coronavirus lockdowns. This optimistic development has placed Germany ahead in the region, with unemployment expected to continue enjoying a sharp decline for the rest of the year as Daimler AG creates 3,000 more jobs at tech hubs around the country.
Germany is still considered to be one of the most international economies in the world, making it ideal for business expansion. Exports still account for approximately half of the nation’s GDP (USD $1.5 trillion), making Germany one of the three largest trading nations worldwide, behind China (USD $2.5 trillion) and the United States (USD $1.6 trillion).