Gross domestic product (GDP)

The German economy again grew strongly in 2011. The price-adjusted gross domestic product (GDP) increased by 3.0% compared with the previous year. Accordingly, the catching-up process of the German economy continued during the second year after the economic crisis. In the course of 2011, the price-adjusted GDP again exceeded its pre-crisis level. The economic recovery occurred mainly in the first half of 2011. In 2009, Germany experienced the most serious post-war recession, when GDP suffered a historic decline of 5.1%. The year 2010 was characterised by a rapid economic recovery (+3.7%).

The GDP growth rate was 3.0% in 2011 even when adjusted for calendar effects, as the number of working days was nearly the same as in 2010.

The impetus for growth was mainly provided by domestic demand in 2011. In particular household final consumption expenditure was a pillar of economic development: in price-adjusted terms, it grew by 1.5%, a rate last reached five years ago. Besides, the year 2011 was again characterised by a strong upward momentum in capital formation: gross fixed capital formation in machinery and equipment (+8.3% in price-adjusted terms) and in construction (+5.4% in price-adjusted terms) was markedly higher than a year earlier.

Although foreign trade contributed less to GDP growth than domestic demand, its dynamic development continued: in price-adjusted terms, Germany’s exports of goods and services rose by 8.2% in 2011 from a year earlier. At the same time, imports grew slightly less (+7.2%). The balance of exports and imports contributed 0.8 percentage points to GDP growth in 2011.

In 2011, the production side of the GDP was still marked by catch-up effects in almost all economic sectors. Overall, the price-adjusted gross value added of all economic sectors rose by 3.0% from the previous year.

Labour productivity increased in the course of the economic recovery in the past year: the price-adjusted GDP per person in employment climbed by 1.6% in 2011 compared with the previous year. When measured per hour worked by persons in employment, however, labour productivity rose by just 1.2% in 2011 because the hours worked by persons in employment increased slightly more than the number of persons in employment.

According to provisional calculations, general government recorded a moderate net borrowing of Euro 26.7 billion. When measured as a percentage of gross domestic product at current prices, the deficit ratio was 1.0%. Thus it was far below the 3% reference value set by the Maastricht Treaty. In both 2009 and 2010, the deficit ratio had exceeded this reference value.