Growth rates
Ifo analysis: Economic crisis primarily hits the West
Only half of the federal states recorded an increase in economic growth in the third quarter. This includes all East German states.
The economic crisis is particularly affecting the industrial centers in western Germany, while the east is growing. This emerges from a quarterly estimate of economic development in the 16 countries presented for the first time by the Munich Ifo Institute.
Accordingly, gross domestic product shrank in the third quarter in eight federal states, including Bavaria, Baden-Württemberg, North Rhine-Westphalia and Lower Saxony, compared to the previous three months.
In the other eight countries, however, economic output grew, including all five new countries. “The brightening of consumer sentiment on the one hand and the problems in industry on the other are causing the countries’ growth rates to diverge significantly,” said Robert Lehmann, one of the two authors of the analysis.
Country analysis should fill the gap
According to figures from the Federal Statistical Office, the nationwide gross domestic product grew by 0.2 percent in the third quarter. The main reason was higher consumer spending. According to Ifo, there has so far been no quarterly documentation of growth in the countries; the economists want to use this to fill a gap. As a precaution, Lehmann and Ifo economics chief Timo Wollmershäuser pointed out that there could be swings in one direction or the other in individual quarters.
Brandenburg was the front runner in the third quarter with an increase of 1.1 percent compared to the previous quarter. Hamburg came last with minus 0.9 percent, followed by Baden-Württemberg (-0.6) and Bavaria (-0.4). In the two southern German federal states, which have long been spoiled by economic success, the two most important German industrial sectors, automobiles and mechanical engineering, play an above-average role. Both industries are heavily dependent on exports. Many companies are suffering from a lack of orders and want to cut jobs.
In a year-on-year comparison with the third quarter of 2023, an eastern German state was also the front runner: Mecklenburg-Western Pomerania was in first place with strong growth of 3.3 percent. Bremen and Schleswig-Holstein suffered the largest decline in the twelve-month comparison, with minus 1.9 percent each.
dpa
Source: Stern
