German Real GDP Per Capita Fell By 5.2% In 2020. Not Bad Relative To France And The UK

In relative terms, Germany is one of a few gainers in the EU. The real GDP fall was much smaller than in France and Austria. Figure 1 demonstrates that the real GDP per capita has been growing at a healthy pace since 1970 - $593 per year. In 2019, it reached $49,991 (constant 2015 US dollars) as reported in the OECD database. In 2020, the COVID-19 pandemic affected the German economy, and the curve in Figure 1 fell to $47,506, i.e. by $2,485 (see Figure 2). (In Austria, the absolute fall in the real GDP per capita in 2020 was $3,705, in France $3,605, in the UK - $4.584.) The same level was observed in 2015. In 2020, the GDP per capita fall was just marginally larger than that observed in 2009 - $2,418. Therefore, the Great depression has the same impact on the German economy as the COVID-19 pandemic. It might be related to the industrial orientation of the German economy and a more competent reaction to the pandemic as expressed by much lower numbers of COVID-19 cases and fatalities. The stability of the German industry is based on the availability of materials and energy. This makes the Nord Stream 2 a vital asset for further economic progress. There are different views on the German future. For example, Greens are aimed at the conversion of the German economy into a post-modern country living on donations.  The highest technical skills will degrade and the economic power of Germany will decrease. The beneficiaries of this process are obvious. It will be similar to the degrading economic status of France in the EU after the Monetary Union was introduced but on the global scale.

If to convert the absolute fall in the real GDP per capita into the relative fall one obtains 5.2% with 5.7% in 2009 (see Figure 3), i.e. much lower than 7.55% observed in Austria, 9.3% France, and 11.6% in the UK. The COVID-19 situation in 2021 is still difficult with vaccination problems, lockdown measures, and extensive anti-covid protests. The German economy has good long-term perspectives of real growth.

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