The German economy at a glance
The table headed "The German economy at a glance" provides key information about current economic activity in Germany. It contains data on developments in economic activity, prices and interest rates, for example, as well as data on the general government sector.
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|1 Gross domestic product|
Gross domestic product (GDP) measures the value of the goods and services produced within an economy in a specific period (eg quarter or year). When calculating and presenting gross domestic product, a distinction is made between the production (or output), expenditure and income approaches. According to the production approach, GDP equals the sum of gross value added (total value of goods and services produced in the production process (production value), less the value of intermediate goods) in the institutional sectors plus taxes on products and less subsidies on products (which are not broken down by sector). Presentation in prior-year prices is a method of calculating price-adjusted GDP. The percentage change in price-adjusted GDP serves as a measure of economic growth and is thus the key figure in the national accounts.
|2 Output in the production sector|
|The production index measures the monthly output of the production sector in Germany, with price changes eliminated. Owing to its frequency, its ready availability and the detailed breakdown by economic sector, it is a pivotal and up-to-date indicator of economic development. The production index for the production sector covers the areas of industry, energy and construction, consisting of the main construction sector and the finishing trades.|
|3 Retail turnover|
|Retail trade (excluding the sale of motor vehicles and motorcycles and retail sale of automotive fuel in specialised stores) includes the sale of merchandise predominantly to households. This mainly comprises the sale of consumer goods in stores including warehouses, by mail order and over the internet; this also includes sales at market stalls and by hawkers as well as door-to-door sales.|
|4 Orders received|
|Orders received comprise the value (excluding value added tax) of all orders confirmed in the respective month under review. Orders received are a leading indicator of economic growth. The Federal Statistical Office collects the figures separately for industry and the main construction sector each month and publishes them as both a value index and a volume index.|
|5 Consumer prices, producer prices and import prices|
Consumer price indices measure the average change in the prices of all goods and services households purchase for consumption purposes. These include, for example, food products, other consumer goods, housing rents, electricity, fuels and services. The change in consumer prices is used to determine inflation, defined as a sustained high increase in the price level. The year-on-year percentage change in the Harmonised Index of Consumer Prices, or HICP, (ie the inflation rate) is the statistical base used to assess whether prices are stable in the Euro area.
The producer price index for industrial products (domestic sales) measures the average change in the prices of raw materials and industrial products manufactured and sold in Germany. Examples of these include petroleum products, metals, basic chemicals and food products. The producers of these goods belong to the manufacturing sector, the energy and water supply sector and the mining sector.
Import prices measure the average change in the prices of all goods that are traded between foreign countries and Germany. In keeping with their importance for imports, the prices of, for example, petroleum, refined petroleum products, other raw materials and grain as well as motor vehicles and motor vehicle parts, machinery and chemical products are aggregated.
|6 Labour cost|
|Labour cost comprises the total of all expenditure borne by employers for employing staff. Labour cost includes, for example, the compensation of employees with gross wages and salaries in the form of cash or in kind, employers' social contributions, the costs of professional education and training, and expenses in connection with the recruitment of new employees. Labour cost does not include grants for employers, such as subsidies for employing the long-term unemployed.|
|7 Labour market|
According to the European System of Accounts, persons in employment are persons aged 15 years and over who engage in at least one hour a week of productive activity for remuneration in the reporting period or who have an employment contract, ie employees (including the armed forces and contributing family workers), independently operate a trade or agricultural business or are self-employed. In line with international practice, persons who are not at work but have a job attachment (for example, persons on maternity leave or parental leave who have embarked on this leave from an existing employment arrangement) are also considered to be in employment on the basis of their continued formal job attachment.
The Federal Employment Agency defines unemployed persons as all persons who are without employment or have only short-time employment (less than 15 hours per week) and are seeking an employment contract of at least 15 hours per week which is subject to compulsory insurance contributions. They must have registered as unemployed and be available for job placement, and cannot be unfit for work due to illness.
|8 External sector|
The external trade statistics record Germany's cross-border trade in goods with foreign countries. They capture and present all goods physically entering and exiting the country as well as electricity. This also covers imports and exports of goods that are brought into or taken out of the country free of charge or at another country's expense. All forms of services are generally not included in the external trade statistics. The difference between exports and imports is the external balance.
The current account is a component of the balance of payments. It consists of trade in goods (1), trade in services (2), primary income (3) and secondary income (4). A current account surplus means that the relevant economy is producing more than its consumption of domestic and foreign goods. The economy thus accumulates external assets on balance. In the case of a current account deficit, the situation is reversed.
|9 Euro foreign exchange reference rate of US dollar|
|Since the introduction of the euro on 1 January 1999, there has been no autonomous foreign exchange market for the currencies replaced by the euro; the euro alone is quoted against the US dollar and other non-euro-area currencies. The euro foreign exchange reference rates for the key international currencies are established on the basis of the daily concertation procedure between European central banks, which takes place at 14.15. During this concertation procedure, only one reference exchange rate (ie the mid-rate) is determined, and indirect quotation is used (ie €1 = x foreign currency units). The ECB is responsible for publishing the euro foreign exchange reference rates.|
|10 Three-month Euribor|
Euribor refers to the average interest rates at which banks with first-class credit quality are prepared to lend one another euro funds on the unsecured interbank market at the specified maturities (in this case, three months). The Euribor rates are determined daily (except for weekends and TARGET closing days) by Reuters at a panel of banks and published at 11.00 CET.
Euribor serves as a reference value for banks in a variety of transactions (eg short-term lending, deposit products, interest rate products).
|11 Yield on outstanding fixed-income securities|
|The yield on bonds outstanding is the average yield on fixed-income securities of domestic issuers, where the yield depicts the actual annual remuneration. To calculate the average value, the yields of the individual securities are weighted by their amounts outstanding (total volume sold). The calculation includes only bonds with an original maturity of more than four years and a residual maturity of more than three years. Yields on bonds outstanding are widely regarded indicators of interest rate movements and are often used as reference measures in legal settings and by the banking industry.|
|12 Loans to the domestic private sector|
|Loans to the domestic non-financial private sector constitute loans granted by monetary financial institutions (MFIs, excluding the Deutsche Bundesbank) in Germany to non-financial corporations and households resident in Germany. The published figures are adjusted for purely accounting-related movements that are not caused by any underlying business transactions. This notably includes write-downs/write-offs. The loan data are also adjusted for sales and securitisation, because, in terms of reporting, securitised loans (if they are derecognised from MFIs' balance sheets) reduce the stock of loans originated by MFIs, even though the volume of MFI loans provided to the real economy remains unchanged. The MFI sector's lending to the non-financial private sector is a key component of the monetary policy transmission process.|
|13 General government|
The general government fiscal balance equates to the difference between the revenue and expenditure of central government, state government, local government and social security funds based on the methodological concepts of the European System of Accounts. If, for example, expenditure in a given period exceeds revenue, the result is a negative balance, or a deficit.
General government (gross) debt as defined in the Maastricht Treaty encompasses liabilities in the form of cash and deposits (coins in circulation), money market and capital market paper, and long and short-term loans. The fiscal balance and debt level are the key fiscal indicators underlying the EU's excessive deficit procedure.
|Households' financial assets are the total financial assets held by domestic households, particularly in the form of cash, bank deposits, securities and claims on insurers. Debt, on the other hand, comprises households' liabilities, which in Germany consist exclusively of loans (especially from banks).|
Sources for the explanatory comments on real economic indicators:
Federal Statistical Office, Statistical Yearbook 2015, Glossary, and Bundesbank interpretation.