But a surprising growth champion emerges

The German economy is showing no growth dynamics and is in danger of falling into a downward spiral, but some federal states are bucking the trend. One federal state stands out as a growth champion.

Berlin – The German economy is still not getting off the ground. According to the Institute for Macroeconomics and Business Cycle Research (IMK) of the Hans Böckler Foundation, this is not expected to change over the course of the year. On average, gross domestic product (GDP) is expected to grow by 0.0 percent. But there are exceptions: The economy in Mecklenburg-Western Pomerania grew more strongly in the first half of the year than in any other federal state. In a sense, it is the German growth champion – and is defending this title.

German economy faces downward spiral, but some federal states defy the trend

The GDP in Mecklenburg-Western Pomerania increased by 3.1 percent in the first six months compared to the same period last year, the state statistical offices announced on Tuesday, September 24. Nationwide, the economy shrank by 0.2 percent. The state owes its good performance to a “strong increase in gross value added in the manufacturing sector,” it said. Mecklenburg-Western Pomerania was already the German champion in economic growth in 2023, with this being founded, among other things, by the new liquefied gas terminal in Lubmin that has come online.

Hamburg took second place in the first six months with an increase of 2.2 percent, followed by Schleswig-Holstein with 1.1 percent. Baden-Württemberg performed worst: Here, gross domestic product shrank by 1.3 percent, more than in any other federal state. The reason: economic output there “declined, especially in industry and construction,” according to the State Statistical Office.

Baden-Württemberg and Thuringia are problem children in economic growth

In Thuringia, the decline was similarly strong at 1.2 percent. Bremen (-1.0 percent), Saxony (-0.7 percent), Bavaria (-0.6 percent) and Brandenburg (-0.4 percent) also reported declining economic output. The economically strongest federal state of North Rhine-Westphalia, on the other hand, achieved mini-growth of 0.1 percent, while Lower Saxony stagnated.

Europe’s largest economy is heading for stagnation this year. There is no sign of a stronger upturn in sight for 2025 either. The IMK lowered its economic forecast to growth of just 0.7 percent. One reason for this is the crisis in industry, whose business in China, for example, is no longer doing so well. In addition, many consumers are holding back on spending money, even though real wages are rising again. In view of increasing unemployment, many consumers remain cautious. (Reuters, woman)