According to the Munich IFO Institute, the economic situation in northern Germany is significantly better than in the rest of the country. According to the institute’s numbers, that grew Gross domestic product Only in five of the 16 federal states compared to the previous quarter. Especially for the three major federal states in the north, things are going better than in the rest of the Republic: Lower Saxony grew the strongest with 1.4 percent, followed by Mecklenburg-Western Pomerania (+1.1 percent) and Schleswig-Holstein (+1.0 percent). Hesse and Hamburg were therefore also able to grow slightly.
The upswing in the armaments industry plays a central role, said IFO business expert Robert Lehmann. In Hesse it is particularly good for finance and company service providers.
In Bavaria, Berlin and Saarland, the gross domestic product dropped by 0.3 percent compared to the previous quarter. The economic situation in Bavaria remains weak. According to the official statistics, economic output in the Free State decreased by 1.0 percent.
Energy -intensive companies inhibit economic output
In Baden-Württemberg, the gross domestic product fell by 0.4 percent compared to the previous quarter. In North Rhine-Westphalia, the economy even shrank by 0.6 percent. As in Rhineland-Palatinate, this is the expression of a relatively higher share of energy-intensive industries, said economist Lehmann. The bottom was in the fourth quarter of Saxony with a decline of 1.8 percent.
The German economy overall shrank by 0.2 percent in the fourth quarter as well as in 2024. For the current year, the economic prospects are also steamed because of the trade conflict with the USA. In their community diagnosis for the federal government, the leading institutes only expect a slight increase of 0.1 percent.
