ASSIGNMENT ON BALANCE OF PAYMENT - GERMANY

GUIDED BY PROF.RAVI KUMAR Submitted By A.sivaji SA1032

Balance of payments (BOP) accounts are an accounting record of all monetary transactions between a country and the rest of the world.[1] These transactions include payments for the country's exports and imports of goods, services, and financial capital, as well as financial transfers. The BOP accounts summarize international transactions for a specific period, usually a year, and are prepared in a single currency, typically the domestic currency for the country concerned. Sources of funds for a nation, such as exports or the receipts of loans and investments, are recorded as positive or surplus items. Uses of funds, such as for imports or to invest in foreign countries, are recorded as negative or deficit items. When all components of the BOP accounts are included they must sum to zero with no overall surplus or deficit. For example, if a country is importing more than it exports, its trade balance will be in deficit, but the shortfall will have to be counterbalanced in other ways such as by funds earned from its foreign investments, by running down central bank reserves or by receiving loans from other countries. While the overall BOP accounts will always balance when all types of payments are included, imbalances are possible on individual elements of the BOP, such as the current account, the capital account excluding the central bank's reserve account, or the sum of the two. Imbalances in the latter sum can result in surplus countries accumulating wealth, while deficit nations become increasingly indebted. The term balance of payments often refers to this sum: a country's balance of p ayments is said to be in surplus (equivalently, the balance of payments is positive) by a certain amount if sources of funds (such as export goods sold and bonds sold) exceed uses of funds (such as paying for imported goods and paying for foreign bonds purchased) by that amount. There is said to be a balance of payments deficit (the balance of payments is said to be negative) if the former are less than the latter. Under a fixed exchange rate system, the central bank accommodates those flows by buying up any net inflow of funds into the country or by providing foreign currency funds to the foreign exchange market to match any international outflow of funds, thus preventing the funds flows from affecting the exchange rate between the country's currency and other currencies. Then the net change per year in the central bank's foreign exchange reserves is sometimes called the balance of payments surplus or deficit. Alternatives to a fixed exchange rate system include a managed float where some changes of exchange rates are allowed, or at the other extreme a purely floating exchange rate (also known as a purely flexible exchange rate). With a pure float the central bank does not intervene at all to protect or devalue its currency, allowing the rate to be set by the market, and the central bank's foreign exchange reserves do not change.

BALANCE OF PAYMENT OFGERMANY Item 1.current account 1.foreign trade exports(fob) imports(fob) 2.services of which travel 3.income of which investment income 4.current transfers of which net contribution to EU budget other official current transfers to non-residents(net) 2.capital transfers 3.financial account(net capital exports) 1.direct investment German investment abroad Foreign investment in Germany 2.portfolio investment German investment abroad Of which shares Bonds and notes Foreign investment Germany Of which shares Bonds and notes 3.financial derivatives 4.other investment Monetary financial intuitions of which ;short-term Enterprises and households of which short-term General government of which short-term bundesbank 5.change in reserve assets at Transaction values(increase) 4.errors and omissions 2007 +181.2 +199.5 987.4 787.9 -28.8 -34.3 +43.3 +43.1 -32.8 -16.9 -0.4 +0.1 -210.2 -66.1 -124.7 -58.6 +153.8 -148.0 +21.9 -101.2 +301.8 +52.8 +198.4 -86.1 -210.8 -153.1 -40.6 -8.4 +17.4 +5.0 +7.8 -54.4 -1.0 +28.9 2008 +154.8 +179.5 1,018.9 839.3 -26.9 -34.7 +35.6 +35.1 -33.4 -15.9 -1.1 -0.2 -160.2 -49.8 -52.7 +2.9 +51.4 +25.1 +39.1 -24.2 +26.3 -34.7 +29.8 -30.2 -129.6 -129.2 +0.3 +20.7 +17.3 +9.1 +10.5 -30.2 -2.0 +5.6 2009 +133.7 +135.7 832.5 696.8 -19.0 -33.3 +50.1 +50.2 -33.0 -15.6 -3.2 +0.1 -145.4 -29.2 -56.3 +27.1 -82.7 -69.1 -2.8 -81.2 -13.6 +2.3 -171.7 +12.4 -49.1 +61.7 +59.8 -42.5 -4.0 -3.2 -o.6 -83.0 +3.2 +11.6 2010 +141.4 +157.0 983.4 826.4 -22.0 -32.4 +44.5 +44.8 -38.1 -18.6 -4.3 -0.6 -131.4 -44.3 -79.2 +34.8 -124.9 -171.3 +0.2 -156.1 +46.4 -4.1 +48.3 -17.6 +57.1 +214.7 +142.9 -47.8 -2.8 +32.3 +85.3 -142.1 -16 -9.4

Balance of payment ofGermany current account decrease from 2007 to 2010 because of decrease the foreign trade, services of which travel, income of which investment income, current transfers, capital transfers, direct investment, portfolio investment, financial derivatives, other investment.

GERMANY CURRENT ACCOUNT TO GDP The Current Account in Germany was last reported at 5.7 per cent of GDP. From 1980 until 2010, Germany's average Current Account as per cent of GDP was 1.83 per cent reaching an historical high of 7.40 per cent in December of 2007 and a record low of -1.70 per cent in December of 1980. Usually, when Germany records a strong current account, its Gross Domestic Product expands boosted by exports revenues. Also, Germany's exchange rate appreciates as investors begin to expect higher interest rates going forward. However, when Germany reports a stronger than expected current account to GDP, it may also lead to economic overheating and a general rise in prices, also known as inflation, which will make Germany's products less competitive when sold abroad. This page includes a chart with historical data for Germany's Current Account as a per cent of GDP.

Country Germany

Indicator Current Account to GDP

Reference Dec/2010

Actual 5.70

Previous 5.60

GERMANY GDP GROWTH RATE The Gross Domestic Product (GDP) in Germany expanded 1.5 per cent in the first quarter of 2011 over the previous quarter. From 1991 until 2010, Germany's average quarterly GDP Growth was 0.29 per cent reaching an historical high of 2.30 per cent in June of 2010 and a record low of -3.50 per cent in March of 2009. Germany is the largest economy in Europe. The German economy is heavily export-oriented. In fact, exports account for more than onethird of national output. As a result, exports traditionally have been a key element in German macroeconomic expansion, accounting for over half of the economic growth in recent years. Germany is a strong advocate of closer European economic integration, and its economic and commercial policies are increasingly determined within the European Union (EU). This page includes: Germany GDP Growth Rate chart, historical data and news.

Country Germany

Indicator GDP Growth Rate

Reference Mar/2011

Actual 1.50

Previous 0.40

GERMANY GDP PER CAPITA (CONSTANT PRICES SINCE 2000) Germany GDP Per Capita stands at 25473 US dollars, according to the World Bank. The GDP per capita is obtained by dividing the countrys gross domestic product, adjusted by inflation, by the total population. From 1970 until 2008, Germany's average GDP Per Capita was 18655.67 dollars reaching an historical high of 25473.00 dollars in December of 2008 and a record low of 11859.00 dollars in December of 1970. This page includes: Germany GDP per capita (Constant Prices Since 2000) chart, historical data and news.

Country Germany

Indicator GDP per capita

Reference Dec/2008

Actual 25473.00

Previous 25106.00

GERMANY EXPORTS Germany exports were worth 92.1 Billion EUR in May of 2011. German economy is heavily export-oriented (the world's biggest exporter), with exports accounting for more than onethird of national output. Its principal exports are: motor vehicles, machinery, chemical products, electrical devices and telecommunications technology. Most of Germany's exports stay in Europe. Germanys main export partners are France, United States, United Kingdom and Italy. This page includes: Germany Exports chart, historical data and news.

Country Germany

Indicator Exports

Reference May/2011

Actual 92.10

Previous 84.30

GERMANY IMPORTS Germany imports were worth 77.3 Billion EUR in May of 2011. Germans principal merchandise imports are motor vehicles, chemical products, machinery, oil and gas and computers. Germanys main import partners are European Union countries (France, Netherlands, Italy, UK, Belgium), United States and China. This page includes: Germany Imports chart, historical data and news.

Country Germany

Indicator Imports

Reference May/2011

Actual 77.30

Previous 73.40

GERMANY INFLATION RATE The inflation rate in Germany was last reported at 2.3 per cent in June of 2011. From 1992 until 2010, the average inflation rate in Germany was 1.90 per cent reaching an historical high of 6.40 per cent in May of 1992 and a record low of -0.40 per cent in July of 2009. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well-known measures of Inflation are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy. This page includes: Germany Inflation Rate chart, historical data and news.

Country Germany

Indicator Inflation Rate

Reference Jun/2011

Actual 2.30

Previous 2.30

GERMANY UNEMPLOYMENT RATE The unemployment rate in Germany was last reported at 7 per cent in May of 2011. From 1991 until 2010, Germany's Unemployment Rate averaged 9.73 per cent reaching an historical high of 12.10 per cent in March of 2005 and a record low of 7.30 per cent in December of 1991. The labour force is defined as the number of people employed plus the number unemployed but seeking work. The non-labour force includes those who are not looking for work, those who are institutionalised and those serving in the military. This page includes: Germany Unemployment Rate chart, historical data and news.

Country Germany

Indicator Unemployment Rate

Reference May/2011

Actual 7.00

Previous 7.10

GERMANY CURRENT ACCOUNT BALAN CE IN US DOLLARS

The Current account balance in US dollars in Germany was reported at 160.63 billion U.S. dollars in 2009, according to the International Monetary Fund (IMF). In 2015, Germany's Current account balance in US dollars is expected to be 132.80 billion U.S. dollars. Current account is all transactions other than those in financial and capital items. The major classifications are goods and services; income and current transfers. The focus of the BOP is on transactions (between an economy and the rest of the world) in goods; services; and income. In 2009, Germany's economy share of world total GDP, adjusted by Purchasing Power Parity, was 4.03 per cent. In 2015, Germany's share of world total GDP is forecasted to be 3.44 per cent. This page includes a chart, historical data and forecast for Germany's Current account balance in US dollars.

GERMANY INDUSTRIAL PRODUCTION Industrial Production in Germany expanded 7.6 per cent in May of 2011 when adjusted for working days. Industrial production measures changes in output for the industrial sector of the economy which includes manufacturing, mining, and utilities. Industrial Production is an important indicator for economic forecasting and is often used to measure inflation pressures as high levels of industrial production can lead to sudden changes in prices. From 1979 until 2010, Germany's industrial production averaged 1.31 per cent reaching an historical high of 14.00 per cent in April of 2010 and a record low of -22.50 per cent in April of 2009. This page includes: Germany Industrial Production chart, historical data and news.

Country Germany

Indicator Industrial Production

Reference May/2011

Actual 7.60

Previous 9.30