East Germany is catching up: Thuringia reaches Bavarian level!

East Germany is catching up: Thuringia reaches Bavarian level!

On May 18, 2025, the results of the “ifo Fact Monitor East Germany” study were published, which offers a comprehensive analysis of economic, social and scientific developments in the eastern German federal states. The study, prepared by the Ifo Institute Dresden on behalf of the Central German Foundation for Science and Education, shows that although East Germany has caught up significantly in various areas, there are still structural differences to the West. Thuringia's industrial share has now reached the level of Bavaria, which is seen as a positive sign for the region.

The analysis is based on around 170 indicators and highlights the differences within East Germany and in comparison to West Germany. While East Germany is making progress in economic performance, research spending and quality of life, the study also finds that the East's economic performance is only 86 percent of the West German average, measured by gross domestic product per hour worked.

Economic development and challenges

The economic developments in eastern Germany show a differentiated picture: between 2019 and 2024, annual economic growth in the east was 0.3 percent, whereas no growth was recorded in the west. What is particularly striking is Saxony's export quota, which at 32 percent is above the West German average. In addition, Saxony, together with Berlin, is one of the leaders in research spending.

Another result of the study is the lower wage structure in the new federal states. East German hourly wages are around 12 percent below the level in West Germany, and in rural regions they are even up to 17 percent lower. Despite the lower wages, real wages in East Germany are put into perspective at over 90 percent of the western level due to the lower cost of living. The proportion of the foreign population in East Germany is 7.2 percent, in the West it is 15.6 percent.

Strategic tools and future perspectives

The Saarow District has viewed the monitor as a strategic tool for making economic opportunities visible and is calling for structural policy measures to be based on data. Frank Nehring, spokesman for the Saarow District, emphasizes that East Germany should be seen as a laboratory for the future. There must be more trust in one's own strengths and the courage to adopt new economic policy approaches must be encouraged.

Specific questions about promoting economic development in the region were raised, including how small companies can succeed in becoming innovation drivers and what role East German universities could play as innovation centers. The aim is to create a visible industrial ecosystem for skilled workers and research.

• Was ist notwendig, damit kleine Unternehmen in Ostdeutschland Innovationstreiber werden?
• Wie können ostdeutsche Hochschulen zu Innovationszentren werden?
• Was fehlt, damit Ostdeutschland ein sichtbares industrielles Ökosystem für Fachkräfte und Forschung wird?

The members of the Saarow Circle do not see themselves as a classic interest group. Rather, they see themselves as a platform for orientation, discussion and change. The “Saarow Dialogue” aims to provide impulses and discuss new economic and industrial policy concepts in order to sustainably secure and expand value creation and productivity in Eastern Germany.

The comprehensive analysis of economic development in East Germany offers many starting points for future discussions and measures that can further advance the region. Further information can be found in the study available at zdf.de and mitteldeutsche-stiftung.de are visible.