East Germany on the rise: Economic forum started in Bad Saarow

East Germany on the rise: Economic forum started in Bad Saarow

According to a current ifo study, the economic situation in East Germany shows a significant catching-up process compared to West Germany. This was discussed at the East German Economic Forum (OWF) in Bad Saarow, where Federal Minister of Economics Katherina Reiche gave a welcoming speech. The three-day conference deals with important topics such as stimulating the German economy, high energy prices, the shortage of skilled workers and the tax burden.

Mecklenburg-Western Pomerania's Prime Minister Manuela Schwesig opened the forum and introduced her perspective on the region's economic development. According to the study, East Germany has caught up significantly in the areas of economy, research and quality of life, but remains structurally behind West Germany. Thuringia's industrial share has now reached the level of Bavaria, which is a sign of positive economic development.

Economic indicators and growth rates

The ifo study, which was prepared by the Ifo Institute Dresden on behalf of the Central German Foundation for Science and Education, compares around 170 indicators of economic, social and scientific development between East and West. An outstanding result is that Saxony's export quota is an impressive 32 percent above the West German average. Despite this progress, East Germany's economic performance is only 86 percent of the West German average, based on gross domestic product per hour worked.

Another interesting point is that annual economic growth in the East averaged 0.3 percent between 2019 and 2024, while the West only recorded growth of 0.0 percent. Nevertheless, the wage situation in East Germany remains challenging: wages are around 12 percent below the level in West Germany, and in rural regions they are even up to 17 percent lower.

Research expenditure and quality of life

Particularly noteworthy are the research expenditures in Saxony and Berlin, which are among the top regions in Europe. Real wages in the new federal states reach more than 90 percent of the western level, which is put into perspective by the lower cost of living. Nevertheless, the proportion of the foreign population in East Germany, at 7.2 percent, is significantly lower than in the West, where it is 15.6 percent.

Finance Minister Lars Klingbeil from the SPD is expected on the last day of the OWF, which shows that the topic of economic development in East Germany is also lost in the political agenda. It remains to be seen how the measures taken and the findings gained from the study can be integrated into politics in order to further strengthen the catch-up process and reduce structural differences.

For more detailed information on the ifo study, it is worth taking a look at the reporting from MDR and ZDF.