Macroeconomic Analyses of Germany

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Macroeconomic Performance:

a. The country chosen for the assignment is Germany, the macroeconomic indicators chosen for the country are GDP, GDP per capita growth, employers, stocks, inflation, CPI, Household Prices, Unemployment rate and current account balance. The time duration taken for the assignment is from 2008 to 2018 that is 10 years of data. The data is taken from World Development Indicators where data of all the countries is given.

The above table shows the nine indicators with their respective values over the span of ten years, there has been quite ups and downs in the values of the indicators. For instance, the GDP of the country has been fluctuating since 2008 where it was 0.96 during the FY08 and negative in the next. However, it quickly reached to 4.17% in only one year which shows frequent fluctuations about the GDP of Germany. Similarly, after observing the unemployment indicator the Germans have started getting jobs and there is a high decrease in the unemployment rate. It was 7.52% in 2008 but it was 3.3% in 2018 that is a significant reduction in the unemployment rate. 

b. There can been seen important relationship between different macroeconomic indicator like the relationship between employment and unemployment, relationship between GDP and GDP per capita and relationship between Household prices, Consumer price Index (CPI) and Inflation. When observing the first relationship that is between employment rate and unemployment rate, we can see that there is a 4% decrease in the unemployment rate whereas there is not much decrease in the employment rate. The employment rate in 2008 was 4.7% where as it was 4.2% that is not a huge reduction in the employment among the Germans. This means as the country got hold of the financial crises more and more people were employed. The values belonging to the indicators in the second relationship has been frequently fluctuating, the values aren’t fixed even for two years. The values of GDP and GDP per capita have been changing side by side and are really close. However, it has been recorded that the GDP and per capita was low due to the international financial crisis 2008 but the country has overcome the crisis and the growth rate is increasing gradually. Germany has become stable than other euro countries (OECD, 2018).

The above graph shows the fluctuations in both GDP and GDP per capita, in 2018 the GDP growth is decreasing along with the GDP per capita.

The OECD (2018) reports also states that the export performance by the country is much more productive than other countries like France, Japan, UK and USA. When talking about inflation, there has been a steady increase in the inflation due to increase in oil rate, it was quite low 2009 and 2016 but now it is steady at 1.73% (OECD, 2018).  Moreover, in Germany Consumer Price Index (CPI) is among the major macroeconomic indicators to evaluate the financial value movements. When there is a percent change in CPI to the same year or month or the prior years is substantially known as inflation rate. So, CPI and inflation rate are related moves side by side, by looking in the above the CPI has been consequently increasing whereas there are fluctuations in the inflation rate (Moody’s Analytics, n.d.).

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