12/12/2013 International Business Environment Assen Spassov | Automotive Industry in Germany |

Automotive Industry in Germany |

Germany’s balance of payments in 2012 Amid a challenging external environment, Germany’s current account surplus grew distinctly in 2012 to 7% of gross domestic product (GDP), which was only slightly below its previous record high in 2007. On the export side, this rise was attributable to the German economy’s ability to hold its own in markets outside Europe despite the significant slowdown in the pace of growth in 2012. This is partially due to the attractive product range offered by German exporters, although the euro’s lower external value also played a role during the period under review. Germany’s strong export performance vis-à-vis non-euro-area countries greatly outweighed the weak demand that its enterprises faced in the euro area. The import side, too, contributed considerably to widening the current account surplus. In particular, the uncertainties emanating from the crisis in the euro area prompted German firms to hold back on their domestic investment, which adversely affected imports. While noticeable progress has been made in terms of correcting the current account imbalances within Europe, the 2012 surplus underlines the fact that, owing to the greater uncertainty it has engendered, the crisis has also hampered efforts to reduce the overall German current account surplus. The increased desire for safe investments has played a role in this. Safe haven effects helped to boost the net inflow of investment income over and above the structural surplus which is generally generated thanks to Germany’s high level of net external assets. According to the recent data release, Germany’s current account surplus has exceeded the threshold of 6% of GDP – which is a benchmark score under the