NRW economy: growth in sight! Challenges and opportunities 2026!

NRW economy: growth in sight! Challenges and opportunities 2026!

The economic situation in North Rhine-Westphalia shows mixed signals, as the current economic report from the RWI Leibniz Institute shows. In 2022, economic output in North Rhine-Westphalia recorded a decline of 0.4 percent. For 2026, however, the RWI forecasts economic growth of 1.5 percent, which is in line with the nationwide development. These impulses are to be strengthened by a special fund from the federal government, with which investments in modern schools, bridges, rail connections and energy supply have been announced. The old debt solution for municipalities is being fleshed out to help cities and communities.

While the industry is suffering from the challenges of high energy prices and international competitive pressure, the uncertainty caused by the tariff conflict with the USA has unsettled exporters and investors. Ralf Stoffels, President of the IHK NRW, described the situation for companies as tense and called for trust and reliability, especially with regard to energy costs and reductions in bureaucracy.

Current labor market situation and outlook

However, the labor market in North Rhine-Westphalia remains robust. An increase of 13,000 additional jobs is forecast for 2023, although unemployment rises to 7.8 percent. The Minister for Economic Affairs and Climate Protection emphasizes the need for competitive energy prices. Professor Dr. Torsten Schmidt from RWI expresses an optimistic outlook despite geopolitical risks and emphasizes that greater federal spending flexibility could provide stimulus of up to 0.5 percent of gross domestic product per year.

In its analysis, the report also speaks of a recovery at the end of the year, with falling inflation contributing to increasing purchasing power of people. The RWI expects economic growth in North Rhine-Westphalia of 0.8 percent for 2024, compared to 1.3 percent in the federal government. However, increasing employment in Germany since the beginning of 2023 is expected to increasingly rely on people without a German passport, as demographic reasons lead to German nationals dropping out of the labor market.

Political demands for energy supply

In the political arena, Economics and Climate Protection Minister Neubaur has been calling for a bridge electricity price and a reduction in electricity tax to the European minimum for months. These measures are intended to reduce the high burden of energy costs and stimulate the economy. It remains to be seen whether and how Chancellor Olaf Scholz and his ministry will respond to these demands. Federal Minister of Economics Robert Habeck was not mentioned in this context.

Overall, the economic report shows a complex economic situation in North Rhine-Westphalia, which is shaped by political decisions as well as by external economic influences. Overall, the RWI draws a mixed conclusion, but gives hope for bright spots in the economic upswing.