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Michael Grömling IW-Trends No. 3 25. September 2014 The German Current Account Balance and the Recycling of Petrodollars
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The German Current Account Balance and the Recycling of Petrodollars
Michael Grömling IW-Trends No. 3 25. September 2014

The German Current Account Balance and the Recycling of Petrodollars

IW-Trends

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The German economy and especially manufacturers of capital goods have benefited hugely from the investment boom enjoyed by the oil-rich countries for over a decade now. The oil producers allocate a portion of their revenues to furthering capital formation at home. With an economy much more oriented to the manufacture of capital goods than other countries’, Germany’s trade in goods has enabled it to play a significant role in the "recycling of petrodollars". Recently about 17 per cent of Germany’s trade surpluses in capital goods have come from business with petroleum-exporting countries. This also means, however, that oil countries’ primary sector revenues and their investments – and thus part of the German current account surplus – depend on the oil price and the economic stability of the oil producers themselves.

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The German Current Account Balance and the Recycling of Petrodollars
Michael Grömling IW-Trends No. 3 25. September 2014

Michael Grömling: Deutsche Leistungsbilanz und Recycling der Petrodollars

IW-Trends

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