Germany has long been known for its strong economy. During the horrific EU economic crisis in 2011, it stayed strong and supported fellow countries such as Greece. In fact, Germany has the fourth largest economy in the world, following the US, China and Japan. Not bad for a nation with a population of about 80 million.
Germany’s BIP grew by 1,7 percent in 2015, the best economic growth since 2011.
This is a result of a working social market economy with public consumption due to low interest rates, small unemployment rates, and an influx of 5.6% on exports.
Developments in the Iran Nuclear Deal are said to benefit Germany’s economy, as businesses are looking into trade deals with the Persian country recently freed from sanctions. According to a Deutsche Welle report, “Germany’s economy minister has said that Iran’s nuclear deal will ‘open a new chapter’ in relations between the two countries.”
Analysts remain skeptical, especially with the conflict in the Middle East and the economic crisis in China leading in an uncertain direction.
As much as its economy is growing, the DAX is affected by other European markets and by oil prices. Just this week the DAX lost 24 points.
The World Economic Forum in Davos will deal with what is known as the “Fourth Industrial Revolution” a Term which actually came from the German government. It is estimated that German business will invest about € 40 billion every year in Industry 4.0. Delegates will also discuss how to maintain a stable job market with robots and digital media taking over. This subject concerns Germany especially now that it has to provide jobs for a new part of its population: young, male refugees arriving from the Middle East.
At the start of this new year, the world economy is apparently not at the forefront of Chancellor Merkel’s mind. The refugee situation and resulting nationalist extremism require her full attention, which is why the German Chancellor has cancelled her trip to Davos.
by Pauline F.