(228) 3391; there is a US
Branch Office in Berlin and US Consulates General in Frankfurt, Hamburg,
Leipzig, Munich, and Stuttgart
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:Germany Economy

Overview:
The Federal Republic of Germany is making substantial progress in
integrating and modernizing eastern Germany, but at a heavy economic cost.
Western Germany's growth in 1991 slowed to 3.1% - the lowest rate since 1987
- because of slack world growth and higher interest rates and taxes required
by the unification process. While western Germany's economy was in recession
in the last half of 1991, eastern Germany's economy bottomed out after a
nearly two-year freefall and shows signs of recovery, particularly in the
construction, transportation, and service sectors. Eastern Germany could
begin a fragile recovery later, concentrated in 1992 in construction,
transportation, and services. The two regions remain vastly different,
however, despite eastern Germany's progress. Western Germany has an advanced
market economy and is a world leader in exports. It has a highly urbanized
and skilled population that enjoys excellent living standards, abundant
leisure time, and comprehensive social welfare benefits. Western Germany is
relatively poor in natural resources, coal being the most important mineral.
Western Germany's world-class companies manufacture technologically advanced
goods. The region's economy is mature: services and manufacturing account
for the dominant share of economic activity, and raw materials and
semimanufactured goods constitute a large portion of imports. In recent
years, manufacturing has accounted for about 31% of GDP, with other sectors
contributing lesser amounts. Gross fixed investment in 1990 accounted for
about 21% of GDP. In 1991, GDP in the western region was an estimated
$19,200 per capita. In contrast, eastern Germany's economy is shedding the
obsolete heavy industries that dominated the economy during the Communist
era. Eastern Germany's share of all-German GDP is only about 7%, and eastern
productivity is just 30% that of the west. The privatization agency for
eastern Germany, the Treuhand, is rapidly selling many of the 11,500 firms
under its control. The pace of private investment is starting to pick up,
but questions about property rights and e