Economy of Germany

Germany has a highly developed social market economy. It is the largest national economy in Europe, the third-largest by nominal GDP in the world, and the sixth-largest by PPP-adjusted GDP. Due to a volatile currency exchange rate, Germany's GDP as measured in dollars fluctuates sharply, but has ranked among the world's top four since 1960. According to the International Monetary Fund (IMF), Germany accounted for 23.7% of the Eurozone economy in 2025, with which it has achieved a high degree of economic integration. With a population of around 83,000,000 people, Germany represents the largest consumer market in the European Union. It is a founding member of both the European Union and the Eurozone.

Germany is the third-largest exporter globally, with $1.66 trillion worth of goods and services exported in 2024. In 2024, Germany recorded a trade surplus of $255 billion, ranking 2nd worldwide. The service sector contributes around 70% of the total GDP, industry 29.1%, and agriculture 0.9%. Exports account for 50.3% of national output. The main exports of Germany are vehicles, machinery, chemicals, electronics, electrical equipment, pharmaceuticals, transport equipment, basic metals, food products, rubber, and plastics. Germany possesses largest manufacturing economy in Europe, contributing around one third of all manufacturing in Europe. The Germany social security system comprises roughly 25% of GDP, which is high among OECD members. Germany has the world's second-largest gold reserve, with over 3,000 tonnes of gold. As of 2023, Germany spends around 3.1% of GDP, third among major economies, on research and development. It is also the world's second-largest high-technology exporter and ranks in the top 10 of countries by stock market capitalization.

More than 99 percent of all German companies belong to the GermanMittelstand, mostly family-owned small and medium-sized enterprises. These companies represent 48% of the global market leaders in their segments, labelled hidden champions. Of the world's 500 largest publicly listed companies measured by revenue, the Fortune Global 500, 29 are headquartered in Germany, as are 26 of Europe's 100 largest. Germany is home to many financial centres and economically important cities, such as Berlin, Hamburg, Munich, Cologne, Frankfurt, and Stuttgart. Four German banks are among the biggest in the world. Germany is the world's top location for trade fairs; around two thirds of the world's leading trade fairs take place in Germany. Some of the largest international trade fairs and congresses are held in several German cities such as Hanover, Frankfurt, Cologne, Leipzig, and Düsseldorf.

Germany is rich in natural resources such as timber, lignite, potash, and salt. Some minor sources of natural gas are being exploited in the state of Lower Saxony. Until German reunification, the German Democratic Republic mined for uranium in the Ore Mountains (see also: SAG/SDAG Wismut). Energy production in Germany relies predominantly on fossil fuels (30%), with wind power in second place, then gas, solar, biomass (wood and biofuels), and hydroelectric. Germany is the largest industrialised nation to commit to a large-scale renewable energy transition, known as the Energiewende. Renewables produced 46% of electricity consumed in Germany (as of 2019), and Germany has been called "the world's first major renewable energy economy".

However, the extent of Germany's continued reliance on fossil fuels, specifically oil imports from Russia, was made evident following the Russian Invasion of Ukraine in February in 2022 and since then, Germany has faced ongoing and significant economic troubles. Russia's sudden withdrawal from western markets would cause major economic disruptions in Germany, already recovering from the effects of the Covid-19 pandemic, as energy prices in Europe soared throughout 2022. This resulted in an inflationary period, which by winter of that year (when energy is most in demand and thus most expensive) had reached 8.6%. Although by the end of 2025 contraction had technically ceased, with a modest GDP increase of between 0.2 and 0.3%, the situation remains fraught, characterized by rising costs, unemployment, falling productivity, and stagnation in a general atmosphere of economic malaise. On January 1, 2026, Chancellor Friedrich Merz stated that "certain sectors" of the German economy are in "critical condition." On January 31st, Merz and Vice-Chancellor Federal Minister of Finance Lars Klingbeil announced the beginning of large-scale stimulus spending on infrastructure and defense.