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East Germany's Economy Still Lags After 36 Years
The economies of eastern Germany remain behind those of the west even 36 years after reunification. Data from the German Economic Institute show that the gap has not narrowed since 2020, currently standing at approximately 79% of the western economy's strength, compared to over 78% in 2024. The gap depends on factors such as productivity, capital stock, and workforce participation, with a significant decline in research and development, as researchers in eastern Germany represent less than 46% of their western counterparts. Additionally, the region has seen a decrease in the percentage of the population participating in the labor market and faces challenges in attracting investments and migration to sustain population growth. Projections indicate that the population may decline by more than one-fifth by 2045 if migration does not increase. The report reflects that reliance on attracting skilled talent from abroad and the impact of economic policies could influence the future development of eastern Germany.
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