Economic forecasts for Baden-Württemberg 2021 - 2025

First quarter of 2025: Political uncertainty complicates forecasts

After the recession year of 2024, gross domestic product (GDP) in Baden-Württemberg could grow slightly again in 2025. For the first quarter of 2025, the latest nowcast from the Institute for Applied Economic Research (IAW) and the University of Hohenheim predicts real growth in economic output of 0.2% - a low growth rate in a long-term comparison, but a clear difference to the negative growth rates recorded in the previous quarters according to preliminary calculations. According to these calculations, Baden-Württemberg's GDP slumped significantly once again in the fourth quarter of 2024. For the two subsequent quarters, the quarterly growth rates were slightly higher at 0.4% and 0.3%. Due to global economic and geopolitical uncertainties, these forecasts must be interpreted with caution. The calculations are based on data that was last recorded in February 2025.

Quarter-on-quarter rates of change in GDP, 2022-2025

^{© IAW and University of Hohenheim 2025. Data sources: 2022q4 to 2024q4: Ministry of Economy, Labour and Tourism; 2025q1 to 2025q3: IAW and University of Hohenheim, own calculations. The data are adjusted for price, seasonal and working-day effects.}

The term nowcasting means that this is the GDP forecast for the current quarter, for which the official calculation will not be published until the following quarter.

Long-term development of real GDP

Over the last ten years, the special impact of the coronavirus pandemic on GDP growth in the second quarter of 2020 and the countermovement in the two subsequent quarters is the most striking development. From the last quarter of 2022 to the fourth quarter of 2024, economic output has declined almost continuously, with the rate of decline accelerating recently. The current forecast values indicate a reversal of this process. Even if this proves to be the case, economic output will remain below the figure for the beginning of 2022 for some time to come.

GDP level in Baden-Württemberg, 2015-2025

© IAW und Universität Hohenheim 2025. Data sources: 2015q1 to 2024q4: Statistical Office and Ministry of Economy, Labour and Tourism Baden-Württemberg; 20251 to 2025q3: IAW and University of Hohenheim; eigene Berechnungen. The data are adjusted for price, seasonal and working-day effects.

The three-year period of economic recession and weakness visible on the right-hand side of Figure 2, including the forecast period, has had a profound impact on Baden-Württemberg's GDP. The long-term development of growth rates implies that the economy has not grown in terms of GDP compared to the end of 2017.

Baden-Württemberg compared with the national level

The following figure shows that Baden-Württemberg almost consistently recorded a sharper economic decline in 2023 and 2024 than Germany as a whole, which is related to the strength of the manufacturing sector, which was particularly affected.

Quarterly GDP growth rates: Comparison with the federal level

^{© IAW and University of Hohenheim 2025. Data sources for Baden-Württemberg: 2022q4 to 2024q4: Ministry of Economics, Labour and Tourism; 2025q1 to 2025q3 IAW and University of Hohenheim, own calculations. Data sources for the federal level: 2022q4 to 2024q4: Federal Statistical Office; 2025q1 to 2025q3: ifoCAST, Joint Economic Forecast 2025 Project Group, BMWK 2025. All data are price, seasonally and working-day adjusted, seasonal adjustment of national accounts values according to X13 JDemetra+.}

According to the IAW-Hohenheim forecast, growth in Baden-Württemberg will catch up with growth at a national level in the first half of 2025. For the second and third quarters, the forecasts for Germany show almost identical figures to the IAW-Hohenheim forecast for Baden-Württemberg. For the first quarter of 2025, the BMWK predicts a significantly higher growth rate for Germany - unlike the other forecasts used - than for Baden-Württemberg, which falls back again in the second quarter. Once again, the uncertainty due to current political developments must be emphasized at this point.

Forecast for the 1st quarter 2025 (in German)

Forecast for the 4th quarter 2024 (in German)

Forecast for the 3rd quarter 2024 (in German)

Forecast for the 2nd quarter 2024 (in German)

Forecast for the 1st quarter 2024 (in German)

Forecast for the 4th quarter 2023 (in German)

Forecast for the 3rd quarter 2023 (in German)

Forecast for the 2nd quarter 2023 (in German)

Forecast for the 1st quarter 2023 (in German)

Forecast for the 4th quarter 2022 (in German)

Forecast for the 3rd quarter 2022 (in German)

Forecast for the 2nd quarter 2022 (in German)