ency for eastern Germany, Treuhand, has privatized more than
four-fifths of the almost 12,000 firms under its control and will likely
wind down operations in 1994. Private investment in the region continues to
be lackluster, resulting primarily from the deepening recession in western
Germany and excessively high eastern wages. Eastern Germany has one of the
world's largest reserves of low-grade lignite coal but little else in the
way of mineral resources. The quality of statistics from eastern Germany is
improving, yet many gaps remain; the federal government began producing
all-German data for select economic statistics at the start of 1992. The
most challenging economic problem is promoting eastern Germany's economic
reconstruction - specifically, finding the right mix of fiscal, monetary,
regulatory, and tax policies that will spur investment in eastern Germany -
without destabilizing western Germany's economy or damaging relations with
West European partners. The government hopes a "solidarity pact" among labor
unions, business, state governments, and the SPD opposition will provide the
right mix of wage restraints, investment incentives, and spending cuts to
stimulate eastern recovery. Finally, the homogeneity of the German economic
culture has been changed by the admission of large numbers of immigrants.
National product:
Germany:
GDP - purchasing power equivalent - $1.398 trillion (1992)
western:
GDP - purchasing power equivalent - $1.294 trillion (1992)
eastern:
GDP - purchasing power equivalent - $104 billion (1992)

*Germany, Economy

National product real growth rate:
Germany:
1.5% (1992)
western:
0.9% (1992)
eastern:
8% (1992)
National product per capita:
Germany:
$17,400 (1992)
western:
$20,000 (1992)
eastern:
$6,500 (1992)
Inflation rate (consumer prices):
western:
4% (1992)
eastern:
NA%
Unemployment rate:
western:
7.1% (1992)
eastern:
13.5% (December 1992)
Budget:
western (federal, state, local):
revenues $684 billion; expenditures $704 billion, including capital
expenditures $NA (1990)
eastern:
revenues $NA; expenditures $NA, including capital expenditures of $NA
Exports:
$378.0 billion (f.o.b., 1991)
commodities:
manufactures 86.6% (including machines and machine tools, chemicals, motor
vehicles, iron and steel products), agricultural products 4.9%, raw
materials 2.3%, fuels 1.3%
partner