Munich (dpa/lby) – The Association of Bavarian Business (vbw) expects a drop in value creation of 0.3 percent this year. The mix of inflation, energy crisis, shortage of materials and labor shortages “is driving the Bavarian economy into recession,” said Association President Wolfram Hatz on Monday in Munich.
In the past year, the Bavarian gross domestic product is likely to have grown by a good 1.5 percent. However, the energy crisis and the other burdens “take full effect in winter”. In the final quarter of 2022 and in the first quarter of 2023, vbw expects overall economic production to decline and a slight recovery in the second quarter. It was only in the second half of the year that there was “clearer positive growth, which, however, weakened again towards the end of the year”.
The high prices slowed down private consumption, industrial production and investments by companies, said Hatz. Rising interest rates weighed on the construction industry. The global economy is in a weak phase. “The economy in the USA, our largest export market, is developing robustly. But the situation in China is uncertain.”
The labor market is stable. However, “not everyone who loses his job now will find a new job,” said Hatz. Unemployment will rise slightly.
The Bavarian economy is looking forward to the coming winter with concern: “It is likely to be much more difficult to fill the gas storage tanks this year. Energy costs will probably rise again at the end of 2023,” said the association president.
