Year GNP (RM billions) Military exp. (RM billions) % of GNP 1933 59 1.9 3 1934 67 4.1 6 1935 74 6.0 8 1936 83 10.8 13 1937 93 11.7 13 1938 105 17.2 17 1939 130 30.0 23 Table 1: German GNP and defence expenditure, 1933 to 1939. 185 Such high levels of military spending in peacetime stood in stark contrast to that of Great Britain – still then a great world power – at just 8 per cent of GNP in 1938. 186 Such an over-stretching of the economy was of course an avoidable problem. Had the Reich settled on a less aggressive rate of rearmament expansion it would have been possible to balance the needs of exports and foreign currency on the one hand, and on the other, the raw materials for the armaments themselves. Such a decision was politically unpalatable, however, and the two had to be made to coexist through an ever more draconian and innovative system of price controls, tax credits and other mechanisms.
185 Nazism 1919-1945 Volume 2: State, Economy and Society 1933-39 , eds. J. Noakes and G. Pridham, (Exeter, University of Exeter Press, (1984), pp. 297- 298. 186 Ibid, p. 298.
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