Overview

• Germany's overall economy contracted by 0.2% in Q4 2024, but five northern states, including Niedersachsen, Mecklenburg-Vorpommern, and Schleswig-Holstein, recorded economic growth.
• Niedersachsen led regional growth with a 1.4% GDP increase, followed by Mecklenburg-Vorpommern (1.1%) and Schleswig-Holstein (1.0%).
• The defense sector played a critical role in driving growth in northern Germany, according to the Ifo-Institut's analysis.
• Southern and eastern states, such as Bavaria, Saxony, and Saxony-Anhalt, faced significant economic declines, with Saxony's GDP dropping by 1.8%.
• Hessen also bucked the national trend with a 0.8% growth, driven by strong financial and business services, while Hamburg maintained stability over the year.