Germany Economic Overview
The Covid-19 pandemic caused a public health emergency with unprecedented disruptions to economic and social activity in Germany.
Germany´s strong public health response and macroeconomic policies proved its economy more resilient than many of its peers following an 11.3 percent GDP contraction in Q2 2020, according to the International Monetary Fund.. The latter policies encompass fiscal measures amounting to more than 10 percent of GDP over 2020-21, the provision of liquidity to affected companies via Economic Stabilisation Fund measures and the enhancement of short-time work benefits (“Kurzarbeit”). Accordingly, 74 percent of respondents to the AmCham Germany´s 2021 Transatlantic Business Barometer anticipate investment conditions to improve over the next three to four years, up from 18 percent in 2020.
Going into the Covid-19 pandemic, the German economy was in a solid position (account surplus at 7.1 percent of GDP in 2019, record-low unemployment, high private consumption, and government budget surpluses), albeit banks´ low profitability and recovering from a 2019 global contraction in trade that disproportionately affected the automotive industry.
Following high community transmission waves of Covid-19 and corresponding lockdowns, Germany slid into a recession, with its price-adjusted GDP decreasing by 5 percent at the end of 2020. Most affected were the travel and tourism industry, retail trade, and the hospitality and leisure sectors. Given the advancing vaccine rollout – as of June 2021, 46 percent of Germans have received at least one dose – and strong rebound since Q3 2020, prospects of economic and social normality are getting close.
Germany´s most important export destination in 2019 and the years before were the United States. The volume of German exports dampened significantly in 2020, more so than the volume of imports, reducing its overall foreign trade surplus temporarily from roughly USD 20.8 billion in March 2020 to USD 4.1 billion in April 2021. Despite a rebound in production and the foreign trade balance, international supply chain bottlenecks and rising price indices have been among the challenges in 2021.
Entry travel restrictions apply when entering Germany from the United States. Entry is only possible in exceptional cases and with a compelling necessity. Holders of a valid German passport may enter at any time - even if there are entry restrictions. The current exceptions to the entry restrictions can be found on this Frequently Asked Questions section of the Federal Ministry of the Interior, Building and Community.
Travelers must register digitally before arriving in Germany and carry the confirmation of registration with them upon entry. Transit travelers who enter Germany and then immediately travel on to another country do not have to digitally register their entry. All entrants 6 years of age or older who enter the Federal Republic of Germany by air must be tested prior to departure. Exceptions apply to fully vaccinated or recovered persons, who must no longer present a negative test before departure.
For more information contact Office.Berlin@trade.gov.