First forecast shows:

Tyrol’s economy to grow by less than one percent in 2025

Symbolic image

(Bild: Florian Wieser)

The first economic forecast for the current year in Tyrol is now available. The best-case scenario is a growth rate of 0.9 percent. However, only 0.5 percent is also possible. 450 bankruptcies are expected.

At the beginning of the year, the Tyrolean Chamber of Commerce had no really good news in store when it presented its economic barometer, as the "Krone" reported. The "Fact Sheet" on the economic forecast was presented on Monday. This is no cause for celebration either.

Although "a slight growth trend is expected for this year", the anticipated increase is extremely meagre. "Real growth in gross value added of 0.5 to 0.9 percent is forecast," calculates Stefan Garbislander, Head of the Economic Policy, Innovation and Sustainability Department.

Tyrol slipped into weak growth in 2023 - particularly as a result of the energy crisis caused by the war in Ukraine.

Stefan Garbislander

Bild: Manuel Schwaiger

War in Ukraine as a trigger
The expert also explains that "after the coronavirus pandemic came to an end, gross value added in Tyrol rose by 12.5% in real terms in 2022. Tyrol then slipped into the current growth slump as early as 2023 - particularly as a result of the energy crisis in the wake of the war in Ukraine. It therefore fell by 1.0 percent. This weak growth continued in 2024. According to current calculations, real gross value added even fell by 0.5 percent".

Slight minus in construction this year in the worst-case scenario
But back to the present and the near future. The "Fact Sheet" not only provides the growth forecast for all sectors, but also for the individual sectors (see chart).

While an increase of between 5.6 and 6.7 percent is expected for agriculture, forestry and fishing, things look bleak for construction. Garbislander comments: "For this year, slight growth of up to a maximum of 0.3 percent could be expected, amounting to around 1.6 billion euros." In the worst case, however, a decline of 0.2 percent is feared.

(Bild: Krone KREATIV)

Manufacturing and trade can be hopeful
The forecast for the manufacturing sector is slightly better. "After a decline of 3.6 percent in the previous year, the situation is expected to ease this year with slight real growth of 1.1 to 1.3 percent." Gross value added is estimated at 5.6 billion euros. Growth is also expected in the accommodation and food service sector. "We are assuming an increase of 1.2 to 1.5 percent. Around 2.7 billion euros in gross value added is expected," says Stefan Garbislander.

And the retail sector? Thanks to relatively strong wage growth and the end of the inflation wave, a return to a slight growth phase is forecast. Garbislander expects an increase of between 0.4 and 0.5 percent or a gross value added of 3.3 billion euros.

450 bankruptcies expected
Of course, it is not yet possible to say how many company insolvencies there will be as a result of these gloomy forecasts. The Credit Protection Association is expecting around 450. Unfortunately, the first major bankruptcy this year has already occurred in Tyrol. On Monday, the bankruptcy of Travel Europe was finally sealed.