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Germanys price competitiveness

The indicators of the German economy's price competitiveness

The indicators of the German economy's price competitiveness are designed to measure price developments in Germany in relation to those of foreign competitors, taking exchange rate changes into account.

They are calculated as weighted averages of the relative changes in the bilateral exchange rates of the euro against the currencies of Germany's trading partners while taking into account the different price developments in the countries under review. A positive change signifies lower price competitiveness for domestic goods. The weights are based on the trade in manufactured goods and also include third-market effects.

For details relating to the method of calculation, please see the ECB's scheme for real exchange rates (ECB's website, Statistical Data Warehouse, Explanatory note to Table 8.1; details in Occasional Paper Nr 134 ECB from June 2012)