In 2020, the Covid 19 pandemic caused a recession in almost all countries worldwide. Overall, the worldwide gross domestic product (GDP) shrank by 2.7 percent. A study on the future development of the economy in Germany, Bavaria and the world, commissioned by the vbw - Vereinigung der Bayerischen Wirtschaft e. V. (Bavarian Business Association), shows: In 2021, the global economy is already recovering significantly with a plus of 5.2 percent. This means that globally the pre-crisis level has already been reached again. Some of the larger EU member states, including Germany, however, will need until 2022. Different economic effects of the pandemic In some countries, the recession in 2020 was significantly more severe than the projected recovery in 2021. This includes the large western EU member states (including Germany) and the United Kingdom. Other countries such as Switzerland, Poland or the USA will be able to recover from the recession already in 2021. South Korea and China even made it through 2020 without a recession. The main reason for the relatively rapid recovery of the global economy: the recession was not caused by structural imbalances, but by an exogenous shock. As soon as the trigger of the shock – the pandemic – is under control, the economy can resume its dynamic pre-crisis development. Long-term growth of the global economy Overall, global economic output is expected to grow by two-thirds between 2020 and 2040. China will probably make the largest contribution with 31 percent, followed by the USA with 18 percent and the European Union with 11 percent. However, the EU will have to position itself more confidently in the future in order to retain a significant role among its rivals China and the USA. Germany in the long term Until 2040, the German economy will grow at a moderate pace of 1.1 percent per year on average. This growth depends primarily on technological progress. Without technical progress – which is increasingly driven by digitalisation – the German economy would shrink in the coming decades. Spotlight on Bavaria In the past, economic growth in Bavaria has been stronger than in Germany as a whole. And Bavaria will continue to grow somewhat faster in the future (1.2 percent annually until 2040). Responsible for this difference are high-growth sectors that are particularly well represented in Bavaria, such as vehicle construction or the information and communication sector. In addition, Bavaria benefits from a more favourable demographic development. While the German population as a whole will shrink slightly from the mid-2020s, it will continue to grow in Bavaria until the mid-2030s. Structural change continues In Germany today, the goods and services produced are different than a few decades ago, and the labour force is largely employed in different economic sectors than it was back then – economic structures are subject to constant change. "By now, a large part of output and employment in our country is in the service sector. Nevertheless, in international comparison Germany and Bavaria are characterised by a strong industrial core," says Prognos project manager Johann Weiß. And structural change will continue in the future. The vbw Prognos Report takes a detailed look at the prospects for the 20 most important sectors. The future of Bavaria's sales markets Bavaria and Germany are closely intertwined with economies all over the world. Accordingly, the development of the domestic economy also depends on the economic development of the international markets. This is especially true for export-oriented industrial companies. Based on long-term forecasts, the vbw Prognos Report shows future trends and development prospects in 25 economies that are of particular importance for Bavarian foreign trade. The study is not publicly available. If you have any further questions, please contact vbw Authors: Jakob Ambros, Dr Michael Böhmer, Dr Heiko Burret, Dr Oliver Ehrentraut, Jan Limbers, Philipp Kreuzer, Heidrun Weinelt, Johann Weiß (project manager), Eva Willer Our work on this topic Take a look at our latest projects and activities. Industry Conference 2024 26. November 2024 | Event Together with the Alliance for the Future of Industry, the BMWK is organising the Industry Conference 2024, where Michael Astor will present initial interim findings from our study on the resilience and sovereignty of German industry. Read more Guest article in SPIEGEL: How Europe's economy can catch up with the USA and China 2024 | Expertise A race to catch up - this is what Europe needs if it is not to be left behind by the USA and China. In the SPIEGEL guest article, Christian Böllhoff calls for a new match plan with clear priorities for the new EU legislative period. Read more Prognos Economic Outlook® (PEO®) ongoing | Project In uncertain times, there is a growing demand for orientation. PEO® delivers independent figures. Based on our wolrd economy model we project the developments until 2045. Read more Significance of the German economy for Europe 2024 | Project Growth in the German economy benefits the whole of Europe. Our study for the vbw shows that this is due to the size of the economy and its strong foreign trade networks. Read more Study on Poverty and income inequality in the context of the digital transformation 2024 | Project The study for the European Commission examines the impact of digitalisation on the employment situation in the individual member states as well as on the EU economy as a whole. Read more Guest article in WirtschaftsWoche: "Move Europe - it's urgent!" 2024 | Expertise In his guest article "Move Europe - it's urgent!" in WirtschaftsWoche, Christian Böllhoff calls for Europe to reposition itself geo-economically in order to strengthen its position between the economic giants USA and China. Read more Germany: Industry sectors put to the test 2024 | Expertise Mechanical engineering, the automotive industry, pharmaceuticals: In which sectors is Germany still a leader? On behalf of the Handelsblatt, we examined how successfully Germany is holding its own against its international competitors. Read more Future-proof strategies for Europe 2024 | Project Germany and Europe are trying to find their place in the New World Order. Prognos examined four foreign trade strategies for the vbw. Read more Five challenges: How Europe remains competitive in the future 2024 | Expertise What needs to happen for Europe to survive in global competition? We analysed this at the “12 Minutes Europe – Meeting Global Challenges” event organised by the Austrian Federal Economic Chamber. Read more Ludwig-Erhard-Gipfel 17. - 19. April 2024 | Event Christian Böllhoff, CEO of Prognos, discusses the topic of (de)globalization at the Ludwig Erhard Summit with host Dr Wolfram Weimer. Read more The invisible value of care work 2024 | Expertise 72 billion hours: That is how many unpaid care work hours are performed in Germany, annually, by women. In a new paper, we show the value of unpaid care work and how unevenly it is dis-tributed between men and women. Read more Innovation Index Germany 2023 2024 | Project Once again, Prognos has compiled the Innovation Index Germany on behalf of the Vodafone Institute for Society and Communications. The index quantifies the impact the expansion of Germany’s digital infrastructure has had on its innovation strength. 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This study by Prognos and partners indicates the measures necessary to secure strategically important supply chains. Read more The future of the automotive industry in Saarland ongoing | Project The automotive industry continues to undergo fundamental change worldwide. How does this transformation affect the Saarland economy? Read more Increased gas prices and gas price brakes 2023 | Project A study for the vbw on the impact of the gas price brake for Bavarian companies. Read more Effects of deglobalisation on Germany and Europe 2023 | Project Increasing geopolitical tensions are endangering the world trading system. On behalf of the vbw, Prognos investigated possible consequences for the economy in Germany and the EU. Read more Article in "Die Volkswirtschaft": EU reaction to electricity prices 2023 | Expertise The liberalisation of the electricity markets in the EU was once supposed to reduce costs. Sven Kreidelmeyer writes in the Swiss magazine "Die Volkswirtschaft" about the effects of free competition and current developments in the European electricity sector, among other things. Read more Where does Germany's economy really stand? 2023 | Company news Why it’s time for Germany to take an honest look at itself. A guest commentary in the WirtschaftsWoche by Dr Michael Böhmer. Read more Evaluation of the federal grants to GTAI 2022 | Project The aim of Germany Trade and Invest (GTAI) is to promote German foreign trade. Prognos investigated whether they are using their budget effectively. Read more Purpose Economy model 2023 | Project Could purpose become the model for business and society? We investigated this as part of our work for the Future Office and compared it with other scenarios. Read more Decarbonisation of raw materials industries in Germany 2022 | Project A study for the Bertelsmann Stiftung shows which climate policy measures can best support the switch to low-emission production processes. Read more In danger: Objectives of the “Ampel-Koalition” 2023 | New project A short new analysis shows to what extent the shortage of skilled workers threatens the central political projects of the Federal Government. Read more Was it the West’s intention to isolate Russia economically? It did not succeed. 2023 | Expertise Our new analysis shows: Trade with Russia has by no means completely collapsed. Read more Ressource efficiency in Bavaria ongoing | Project Efforts to reduce the consumption of resources in the Bavarian economy must be increased. A Prognos study provides information on the status quo and the starting points for savings. 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Read more Are globalization and Germany’s business model on the way out? Why policymakers and companies need to act decisively – and how they can ensure future success. Joint study with BayernLB. Read more Inflation – extra burden and relief for family households 2022 | Project Calculations on inflation-related additional private household expenditure and the work of the Federal Government's relief package. Read more The effects of Chinese subsidies on Germany 2022 | Project Prognos examined the potential impact of Chinese subsidy practices on Germany in three core sectors of the German economy. Read more Benefits of Covid testing for the Swiss economy and the healthcare system 2022 | Project Testing for Covid interrupted chains of infection, relieved the burden on the health system, and supported the economy. We quantified these effects for Roche Diagnostics Switzerland. Read more Resilient supply chains in the EU 2022 | Project What are possible solutions when supply chains are disrupted due to external shocks? A survey conducted for the European Commission as part of the European Cluster Collaboration Platform provides answers. Read more Innovation Index Germany 2022 2022 | Project How does the expansion of the digital infrastructure affect regional innovation strength? The IID.2022 provides clarification. Read more The world negotiates on climate 2022 | Expertise On Sunday, the 27th UN Climate Change Conference (COP27) begins. Various media sources have picked up on Prognos’ studies and expertise. Read more Poland and Hungary in the EU – an economic success story in danger? 2022 | Project A study of the economic ties between Poland and Hungary with Germany and Bavaria for the vbw. Read more Impact of counterfeit products on global value added 2022 | Project How high are the losses to global value added caused by product and brand piracy? We calculated this as a contribution to a study. Read more No generational conflict: Young and old are primarily looking for security. 2022 | Project Study compares “boomers” and Generation Z: high need for security for young and old alike. Read more Gas shortfall less than expected, prices remain high 2022 | Project update The gas reservoirs are full, and gas shortages are likely to be significantly less of a problem than feared. However, high gas prices have become almost too expensive for some companies to pay. Read more Green finance's contribution to achieving climate neutrality in Germany 2022 | Project What is the public share of climate protection investment? An investigation for the KfW. Read more Status of the gas supply 2022 | Project update What is the latest on the gas supply in Germany? How high is demand? How high are gas storage levels? What would the damage be to the German economy if delivery failed completely? Read more Estimation of costs resulting from climate change in Germany 2023 | Project Heatwave, drought, floods – for the BMWK and BMUV we have systematically combined the quantifiable costs of extreme weather events in Germany since 2000 and supplemented them with detailed studies. Read more Halt to Russian gas supply – consequences for German industry 2022 | Project A new scenario commissioned by the vbw (Bavarian Industry Association) shows what German industry could face if Russia stopped supplying gas. Read more The Swiss-European economic success story in danger 2022 | Project In the absence a framework agreement, the temporary agreements between the EU and Switzerland will gradually expire. Our study for the Bavarian Industry Association (vbw) determines the possible economic consequences. Read more The importance of the German economy for the EU 2022 | Project Through intensive trade relations with EU states, the German economy is an important driver of economic development in the EU. Read more vbw-OnlineCongress & Political Dialogue Brussels: The Importance of German Economy for Europe 2022-05-25 | Event Dr Michael Böhmer presents the results of the study "The Importance of the German Economy for Europe" for the first time. Read more What is at stake for Germany's economy if the world breaks up into blocs 2022 | Project Our new brief analysis shows effects of deglobalisation on the German economy Read more Adobe Stock - CleverStock About us Prognos – Providing Orientation. Prognos is one of the oldest economic research centres in Europe. Founded at the University of Basel, Prognos experts have been conducting research for a wide range of clients from the public and private sectors since 1959 – politically independent, scientifically sound. Learn more