Bavarian economic forecast: despite accretion, 2021 will not reach pre-crisis level
02.04.2021 01:00 Economy
The pandemic crisis has led to a deep recession in the Bavarian economy. After the economic recovery decelerated in late summer 2020, the partial lockdown in November with tighter restrictions over the Christmas season further slowed the economic recovery, reports Jürgen Behrens, Head of Port of Hamburg Representative Office in Munich.
The Bavarian Business Association (vbw) is forecasting the Bavarian economic growth for 2021 to be 3 percent (Bavarian GDP). After a 6.5 percent decline in 2020, it is therefore not possible to reach pre-crisis levels by the end of 2021. The experts expect the pre-crisis level not to be reached before the end of 2022 in the export-strong state.
Bertram Brossardt, General Manager of the Bavarian Business Association reg. assn.: “The published foreign trade figures from November allow for a preliminary conclusion of the year 2020. It looks terrifying for the Bavarian economy. We exported significantly less to all our most important trading partners from January to November 2020 compared to the same period of the previous year.” Exports to the USA and UK fell by 20,5 percent and 19.4 percent respectively. The decline in the export to France is 15.8 percent. For Italy and Austria, the decline in export is at 15.6 percent each. The decline in export, to the most important trading partner China, comes in at a minus of 7.4 percent, compared to the first eleven months of the previous year.
Considering the high level of uncertainty stemming from the pandemic, the investment propensity will remain noticeably dampened worldwide. Bavaria will feel this particularly as a strong export economy with a focus in the investment goods economy. An economic recovery for Bavaria cannot be expected, before the COVID-19 pandemic has lastingly weakened due to vaccinations and warmer weather. International trade conflicts and the BREXIT are an additional cause of concern.