Economy

The Federal Republic of Germany is one of the economic giants of the world. The Gross Domestic Product (GDP) in the year 2003 was 2,130 billion euros and the GDP per capita was 25,800 euros.

As in other industrial nations, the so called "service sector" is increasing and the industrial sector is decreasing. The industrial sector, such as machine engineering, makes up one third of the German economy. Germany is the third largest automobile producer in the world behind the USA and Japan. German machinery and electrical equipment are famous the world over for their high quality and durability and are the most important export goods. Other important industries are the chemical sector and consumer products.

Agricultural produce in Germany differs from region to region. Cereals and sugar beet prevail in the flat north and especially in the eastern states. The mountainous south mostly produces vegetables, milk and meat. Most of the river plains in the south and west of Germany along the river Rhine, Main and Moselle produce wine. Beer is mostly brewed in North-Rhine Westphalia. Bavaria is also famous for its many beers. Homegrown agricultural products are exported but also cover 90 per cent of the country's needs.

Nearly a third of the entire country is forested, especially in the south. The forests supply most of the country’s timber needs. Years of air and ground pollution caused the forest stand to be seriously reduced in the 1970s. The Germans spoke of "Waldsterben" (forest dieback). Since then special programmes have been introduced to develop sustainable forestry.

Germany has what is described as a free and social market economy. The term "Social Market Economy" refers to the economic model that allows free trade but also accommodates the regulatory and controlling functions of the state to prevent an unsocial distribution of wealth.