Realwirtschaft

Realwirtschaft, or real economy, denotes the part of an economy that produces tangible goods and non-financial services. It covers the production, distribution, and use of goods and services, as opposed to the Finanzwirtschaft, which concerns financial markets, banking, and investment activities.

It includes sectors such as manufacturing, construction, energy, agriculture, trade, transport, and many non-financial services (healthcare, education, public administration, professional services). While some activities like real estate or certain service sectors have financial aspects, the term emphasizes productive activity and value creation rather than financial intermediation.

The health of the Realwirtschaft is measured with real GDP growth, employment, productivity, and capacity utilization, all adjusted for inflation. It is affected by monetary policy, fiscal policy, exchange rates, global demand, and prices of energy and commodities.

In policy debates, the Realwirtschaft is contrasted with the Finanzwirtschaft. Shocks in the real economy can spill over into financial markets and vice versa. Policymakers aim to foster growth, employment, and price stability in the real economy, while ensuring financial stability.

The term is commonly used in German-speaking countries and in macroeconomic discourse to distinguish production and real value creation from financial activities.