Dhe Hessian economy suffered more from the corona pandemic last year than that of other federal states. According to preliminary figures, the gross domestic product fell by 5.6 percent, while in Germany it fell by only 4.9 percent overall. This year, Hessen seems to be catching up again – the State Statistical Office published figures at the end of September according to which economic output in Hessen grew by 2.8 percent in the first half of the year, in Germany only slightly better, by 2.9 percent.
Deputy head of the regional section of the Frankfurter Allgemeine Zeitung and editor in charge of the business magazine Metropol.
Gertrud Traud, the chief economist of the Landesbank Hessen-Thüringen, thinks it is a bit meager and gives little hope that things could go better in the second half of the year. Rather, the momentum has subsided.
Traud expects economic growth of 2.6 percent for Germany as well as for Hessen this year. But Traud has one consolation ready: If Hessen has not yet emerged from the particularly deep valley this year, it will certainly do so in the next. For 2022, she and her colleague Barbara Bahadori, who is responsible for regional analyzes, expect growth of 4.1 percent for the Federal Republic of Germany, but the gross domestic product in Hesse will increase by 4.4 percent. These are figures that, in their opinion, should also have a positive effect on the labor market in this state.
According to Traud, the fact that Hessen has slipped deeper into the crisis and is having a hard time making up for it is due to the Frankfurt airport and the trade fair in the metropolis on the Main. The extensive standstill in both sectors had also hit the hotel and catering trade in a special way, and recovery was not going as quickly as hoped.
Space programs endangered
However, the chief economist also looks to the airport and the trade fair for another reason. They stand for the particularly close integration of the federal state with the world economy, which is also reflected in an above-average export share of industry at 55 percent.
What was a guarantee of the state’s prosperity for decades could, in Traud’s opinion, be a disadvantage for Hesse in the next few years. She sees the current delivery difficulties in the world only as a further sign of a general unbundling of the economic areas. China wants to focus more on itself again, and trade barriers will remain in place under the new president in the United States.
The difficulties in the pandemic also led to a reassessment of the international division of labor. The German supply chain law will also contribute to more domestic production. Traud’s sobering conclusion: “Efficiency no longer plays a role.”
She is skeptical of the consequences. The unbundling of the global economy is already driving up costs – at the moment, the consequences of Brexit in Great Britain show that on a small scale – the shortage of skilled workers, a consequence of demographic change, is once again increasing wage costs in a special way.
Rather down on the stock market
A shortage of labor and material would also have completely different consequences – it could be, for example, that ambitious programs to create additional living space failed. “It just doesn’t build a robot.” The Keynesian way of thinking that every problem can be solved with more money and more demand, has its limits. Inflation will not go away again and will tend to rise, continued Traud, summarizing the situation. “There are many indicators of a turning point.”
Traud does not expect any upward trend on the stock markets. At the beginning of this year she had forecast that by the end of the year the Dax would be at 14,000 points, in the meantime she has raised the forecast to 14,500. The index is currently at 15,200. Traud’s predictions had often been correct in the past few years.