German 'economic miracle' cut in half by zero growth
The lowest inflation in the industrialized West. The lowest unemployment. The largest share of world exports, with the world's second- largest share of high-technology exports. It sounds like Utopia, right?
Wrong, if the name of the country is West Germany, and the comparison is with the spectacular postwar "economic miracle." The growth rate is projected at zero or less for 1981, the oil-fueled current- accounts deficit was a record 28 billion marks (somewhat under $14 billion) last year, the mark is pushing the bottom of European Monetary System limits -- and the Mullers and Schmidts may therefore have to forgo some of their treasured vacations in the sun.
To be sure, the phenomenal growth of 10 percent per year in the 1950s and '60 s has ended by the '70s, with a matured economy and the first oil price rises. But the economy still chugged along at respectable 3 and 4 percent annual increases. Inflation and unemployment were consistently the lowest among major industrialized countries.
In addition, West German sales of entire plants abroad, especially in OPEC lands -- along with the appreciation of the mark that kept dollar-priced oil at the same real cost of Germany -- meant that West Germany survived the early 1970 s oil shock handsomely.
This time around it is different. After the 1979 round of oil price rises, imported oil costs shot up 46 percent for 1980, even though conservation efforts brought oil consumption down 9 percent. This reflection of world economic problems coincided with a cylical downturn in the domestic economy.