However, negative yields are not the only concern that the country has in common with Japan. It’s the overall demographic picture that is worrying, and it could have a big effect on Germany’s economic future as well as the tough choices that must be made today.
Germany’s Importance
Germany is the most populous and productive economy in Europe, with 80 million people and a GDP of almost $4 trillion. It’s also the world’s third largest exporter, and that’s why it had the largest trade surplus globally in 2014 with $285 billion.
For all of its economic power, Germany has a key weakness that could potentially be its Achilles heel: it’s projected that Germany’s population will decline significantly over the coming decades, and the ratio of workers to dependents will become one of the worst in the world.
