Comparison of UK's economic performance with that of Germany for the Essay

Comparison of UK's economic performance with that of Germany for the years 2006-2010 - Essay Example According to the Office of national statistics, UK officially entered into economic recession in 2008, the first time in its history. As a result, the rate of unemployment among the youths rose by 5.4% (ONS, 2011, 41). However, this recession was officially reported to have ended on 26th January, 2010. By May 2010, its economic growth rate was reported to be 0.4%, and 1.2% by the second quarter (ONS. 2011, pg 32). For the last 5 years, the economic indices have been reported to be as follows; Table 1; Changes in UK’s GDP between 2006 and 2010 Year GDP (billions of GBP) GDP change (%) 2006 2.9 2007 2.6 2008 1,448 0.6 2009 1’396 -4.9 2010 1.7 Source: ONS Statistics As the table illustrates, the GDP was worst in 2008 and 2009 because of the economic recession. However, a positive change was realized in 2010. Economy of Germany The economy of Germany is the largest economy in Europe. In the world, it is the fourth largest in terms of nominal GDP, second according to PPT, it is fifth. It is second in world’s exporter, accounting for approximately $1.120trillin in its economy (ONS, 2011, 13). About a third of its national output is realized from exports, thus making its balance of payment favorable, compared to that of UK that is normally characterized by deficits. The service sector accounts for about 70%, industry 29.1%, and 0.9% in the agricultural sector of its total GDP (IMF, 2009, pg 321). Most of its products are from engineering, for an example automobile, chemicals, metals and machinery. In December 2010, German’s unemployment rate was found to be 6.1%, lower than that of UK’s 7.8% (Boyes, 2007, pg 65). In Germany, the lowest growth figures of... The essay is the best example of comparison of German and UK economic performances. These two countries have diverse and strong national economies. UK’s economy is the sixth largest world economy in terms of nominal GDP, and seventh in terms of Purchasing Power Parity. In Europe, it is the third largest in terms of PPT after Germany. The economy of Germany is the largest economy in Europe. In the world, it is the fourth largest in terms of nominal GDP. In 2007, the annual growth rate for UK was at an average of 2.68%, according to the IMF (2009, pg 321). Growth in its financial sector contributed a larger economic part, but this declined in 2008 when it suddenly entered into a recession due to the global financial crisis. This began with the Northern Rock’s collapsing and being taken over into public ownership in February the same year. On the other hand, other banks were also nationalized. Such banks included Royal Bank of Scotland Group, According to the Office of national statistics, UK officially entered into economic recession in 2008, the first time in its history. As a result, the rate of unemployment among the youths rose by 5.4% About a third of the German national output is realized from exports, thus making its balance of payment favorable, compared to that of UK that is normally characterized by deficits. The service sector accounts for about 70%, industry 29.1%, and 0.9% in the agricultural sector of its total GDP In December 2010, German’s unemployment rate was found to be 6.1%, lower than that of UK’s 7.8% In EU, the car industry is oligopolistic, rather than perfectly competitive Germany is the largest motor vehicle producer in EU, and it has become very hard for competitors from other regions to compete with its firms. the fact that the firms have captured reasonable market shares in their respective location has made it hard for other competitors to penetrate and survive in their markets