Germany External Debt as a % of GDP Highlights in 2020
Germany’s external debt as a % of GDP hit 162.8% in 2020, an increase of 10.1% over the previous year. Between 2010 to 2020, Germany’s external debt as a % of GDP increased by 2.3%.
According to IMF estimates, the country’s gross government debt stood at $2.42 trillion in 2020 equivalent to 68.9% of GDP. In 2021, Germany is forecasted to record a gross debt of 70.25% of GDP. Germany’s flexible labor market and highly innovative small-and-medium enterprises (SMEs) were the major factors behind its economic resilience during the sovereign debt crisis. Despite the turbulence in the world economy caused by the global financial crisis and the debt crisis, the German labor market remained resilient.
Outlook on Global Economy
Real GDP is measured using inflation-adjusted base year prices. Real GDP changes are a measure of economic growth and show whether there has been an increase or decrease in the volume of economic activity.
According to real GDP, the world's top five economies are the United States, China, Japan, Germany, and India. After the US, China had the largest real GDP in 2021 with a value of $12.7 trillion in 2021. With a $6 trillion real GDP during the same period, Japan came in third place globally. Germany and India are the other two largest leading economies, with real GDPs of $3.8 trillion and $2.9 trillion, respectively.
Factors Affecting the Global Economy
A rise in COVID-19 cases:
As a result of Omicron, a new variant of COVID-19, more cases have been reported worldwide, resulting in the disruption of supply chain management. However, the global vaccination drive has reduced the fatality rate from the coronavirus.
Rising Inflation and Interest Rates:
As a result of rising inflation rates in both developing and advanced economies, central banks have been forced to tighten monetary policy and raise interest rates to keep prices from rising. However, a steady increase in interest rates could cause financial distress in some economies.
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