Growth crisis in Baden-Württemberg: Prognosis indicates continued weakness

Growth crisis in Baden-Württemberg: Prognosis indicates continued weakness

The current economic forecasts of the Institute for Applied Economic Research In cooperation with the University of Hohenheim, indicate a continued growth crisis in Baden-Württemberg. The forecast for the current year shows no significant impulses for gross domestic product (GDP) and the lack of sustainability in economic development.

The Minister of Economics, Labor and Tourism, Dr. Nicole Hoffmeister-Kraut, emphasizes the seriousness of the current situation and does not simply call it a weak growth, but a real growth crisis. The social welfare losses become higher with every persistent crisis, so it is crucial to unleash the productive forces.

In order to combat the growth crisis, the Minister pleads for sustainable impulses and an offer policy that relies on performance incentives and strengthens competitiveness. She sees a possible solution in a corporate tax reform that would reduce the total tax burden of around 30 percent to an internationally competitive level of 20 to 25 percent.

The effects of this growth crisis could be serious in Baden-Württemberg, since the level before Corona pandemic is still not reached. There is a risk that the crisis will further tighten if no effective measures are taken. It remains to be seen how the state government reacts to the forecast and which strategies are being developed to overcome the growth crisis.