In Europe, Germany is the top economic power and top five globally. It is a member of the EU (European Union). The primary reason why the German economy is vital is due to its greatness in innovation and its strong focus on exportation. Ideally, these factors help the nation to compete effectively on global networking. It has high sales in some sectors, including plant and mechanical engineering, car-making, medical technology exports, chemical industries, accounting for half of the total sales. It has a hybrid system of economy that includes various varieties of private freedom, combined with government regulation with centralized economic planning. All these businesses are responsible for the exports, making it a world leader.
The Economy of Germany started its expansion in the second quarter of 2021, with significant indicators pointing to the new growth. GDP (gross domestic product) rose by about 1.5% in the second quarter of 2021 compared to the first quarter. Germany is an economic powerhouse because most economic prowess is medium and small corporations (Krüger, 2021). The roles of these different industries are essential as they improve the economic status of the nation. The share of industry in Germany in gross added value is about 22.9 %, making it among the G7 countries the highest.
Reflecting on the future economy due to the current global crisis is unique. The strongest sectors are the electrical industry, vehicle construction, chemical, and engineering industry. Unfortunately, the nation has two economic problems; production reduction because of the disrupted global supply chains and the shortfall on unprecedented demand resulting from lockdowns. These economic problems have profoundly impacted small-scale businesses and have contributed to slow economic recovery due to the COVID-19 pandemic. Most industries have experienced losses due to low human labor, but these industries are now recovering as time goes and eventually, these industries will catch up.
Conclusively, the recovery shape in the EU with its distributive impact will depend on the effectiveness and ambition of the response policy at the EU and national levels. The two main factors that caused an economic miracle in Germany were eliminating price controls and currency reform, which happened in 1948 for weeks. The other factor was reducing rates of marginal taxes in the following year, 1949. A more ambitious policy reaction will help change the centrifugal forces, safeguard the single market integrity and political and economic viability of the European Union project. The enterprises are always the most competitive across all European nations.
Reference
Krüger, J. J. (2021). A Wavelet Evaluation of Some Leading Business Cycle Indicators for the German Economy. Journal of Business Cycle Research, 1-27.