Economic forecasts for Baden-Württemberg 2021/2022
Fourth quarter 2022: Growth comes to a standstill
The economy in Baden-Württemberg is expected to shrink slightly in the fourth quarter. According to the current nowcast by the IAW and the University of Hohenheim, Baden-Württemberg's gross domestic product (GDP) will decline by 0.2 percent in the fourth quarter of 2022 compared to the third quarter, adjusted for prices and seasonal effects. Weak positive growth is forecast for the two subsequent quarters (see Figure 1). This means that the predicted economic situation deteriorates compared to the previous nowcast of September 2022. One of the reasons for this is that companies are now much more pessimistic about their business situation than they were three months ago.
Figure 1: Rates of change in GDP from the previous quarter, 2021-2023
© IAW and University of Hohenheim 2022. Data sources: 2021q1 to 2022q3; Ministry of Economics, Labour and Tourism; 2022q4 to 2023q2: IAW and University of Hohenheim, own calculations. The data are adjusted for price, seasonal and working-day effects.
For the first time, a new calculation of the GDP for past quarterly values by the Ministry of Economics, Labour and Tourism Baden-Württemberg could be used for the preparation of the Nowcast. It is based on an update of the gross value added in the manufacturing sector with the help of the values for the federal level. Procedures used by the Federal Statistical Office to adjust the data can be used.
Baden-Württemberg compared with the national level
The forecast for Baden-Württemberg can be contrasted with the forecasts for the federal level. For this purpose, the forecast of the Projektgruppe Gemeinschaftsdiagnose (GD 2022) published on 22 September 2022, the ifo nowcast and forecast published on 7 December 2022 (ifoCAST 2022) and the nowcast of the Federal Ministry of Economics and Climate Protection (BMWK) of 28 November 2022 are used. Figure 2 shows a comparison of the different forecasts for the federal level and for Baden-Württemberg.
Figure 2: Quarterly GDP growth rates: Comparison to the federal level
© IAW and University of Hohenheim 2022. Data sources for Baden-Württemberg: 2021q1 to 2022q3: Ministry of Economics, Labour and Tourism; 2022q4 to 2023q2: IAW and University of Hohenheim, own calculations. Data sources for the national level: 2021q1 to 2022q3: Statistisches Bundesamt; 2022q4 to 2023q2 ifoCAST, ifW 2022, BMWK 2022. All data are price, seasonally and working day adjusted, seasonal adjustment of national accounts values according to BV4.1.
The figure shows that the development for Baden-Württemberg is forecast more favourably compared to the nowcasts of the Joint Economic Forecast and the BMWK. These two forecasts suggest that Germany will enter a recession phase in the winter of 2022/23. In contrast, the values of the ifoCAST for the last quarter of 2022 and the first quarter of 2023 are somewhat more favourable than those of the IAW-Hohenheim forecast.
The IAW and the University of Hohenheim produce the GDP forecast for Baden-Württemberg four times a year. The project is funded by the Ministry of Economics, Labour and Tourism Baden-Württemberg.