Southwest economy in the corona pandemic year 2020 in decline

The “National Accounts of the States” working group chaired by President Dr. Anke Rigbers published preliminary economic data at the state level for 2020 that the price-adjusted gross domestic product (GDP) in Baden-Württemberg fell by 5.5% compared to the previous year. In nominal terms, ie at current prices, Baden-Württemberg’s gross domestic product – as a measure of the total goods and services produced here in this country – amounted to almost 501 billion euros in 2020. The weakening economic momentum thus had a more dampening effect here in Germany than in Germany as a whole. In Germany, price-adjusted GDP for 2020 as a whole fell by 4.9% compared to the previous year.

For comparison: Bavaria’s economy also contracted by 5.5% after adjustment for prices in 2020 and economic output in the other large states of Hesse and Lower Saxony also fell by 5.6 and 4.9% after adjustment for prices.

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Domestic industry and the service sectors were particularly hard hit by the economic downturn. Above all, the local industry, which accounts for almost a third of Baden-Württemberg’s economic output, proves to be the central growth engine in »good times«, which contributes significantly to a more favorable economic development in the state. However, the south-west industry remained without growth impulses overall in 2020 and recorded a decline in price-adjusted gross value added of 9.7% compared to the previous year (Germany: −10.5%).

Furthermore, the service areas were dominated by the ongoing corona-related lockdown, with a minus of the price-adjusted gross value added of 4.4% compared to 2019. The area of ​​”trade, transport, hospitality” also recorded a minus of 4.3%. In contrast, the »Financial and Insurance Services« division achieved a slight plus in price-adjusted gross value added of 0.1% compared to 2019. The construction industry also had a stabilizing effect in Baden-Württemberg with an increase in price-adjusted gross value added by 3.0% in 2020 compared to 2019.

In summary, it can be said that the economic performance of Baden-Württemberg has picked up a little more momentum than in the first half of 2020 (−7.7% compared to the same period in the previous year). Nonetheless, 2020 as a whole continued to be heavily impacted by the impact of ongoing pandemic response measures.

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