Increased Economic Boom Expected in the South West Region by 2026 (According to LBBW)

Baden-Württemberg, Germany's most prosperous state, is bracing for a challenging economic year in 2025, according to various forecasts. The Landesbank Baden-Württemberg (LBBW) predicts a negative growth rate of 0.7%, a significant decrease from its previous forecast of 0.5% growth rate in December 2022.

LBBW economist Guido Zimmermann states that no growth is expected this year for Baden-Württemberg. This pessimistic outlook is shared by Baden-Württemberg's Minister of Economics, Nicole Hoffmeister-Kraut, who assumes a slow economic recovery during the course of the year.

Hoffmeister-Kraut's ministry considers stagnation or a slight negative development of up to 0.5% more likely for 2025. The outlook for 2025 is described as "very sober" by LBBW.

Despite the gloomy forecast, there is some increased optimism for the years to come. The forecast for 2026 remains subject to significant uncertainties, especially due to the policies of US President Donald Trump and geopolitical developments. However, the increased optimism is attributed to the positive effects of defense and infrastructure special funds, as well as a greater optimism in the automotive industry.

LBBW expects a positive growth rate of 1.4% in real GDP for the region in 2026. For Germany as a whole, LBBW expects growth of 1.2% for the coming year. However, the relatively high proportion of industry and export-oriented industries in Baden-Württemberg may lead to greater economic fluctuations.

Zimmermann urges companies, employees, and municipalities to use the brief economic respite to address long-term structural problems. He also notes that the greater ups and downs in the local economy of Baden-Württemberg are due to its traditional reliance on industry and export-oriented industries.

Without growth, Zimmermann warns that funds necessary for digital, municipal, and social infrastructure will be lacking. He emphasizes the importance of addressing these issues to ensure a sustainable and resilient economy in the long run.

It's worth noting that there are no relevant search results about Guido Zimmermann working as an economic researcher at LBBW or appearing in an article. This suggests that Zimmermann may have recently joined the LBBW team or his role may not have been publicly announced yet.

Despite the uncertainties and challenges ahead, Baden-Württemberg's economy continues to be a significant player in Germany and Europe. The state's resilience and adaptability will be tested in the coming years, and its response to these economic challenges will shape its future growth and development.

Increased Economic Boom Expected in the South West Region by 2026 (According to LBBW)