East Germany's economy blooms: forecasts show strong growth!

East Germany's economy blooms: forecasts show strong growth!

Dresden, Deutschland - The East German economy is in a positive light and gradually recovered from the challenges of recent years. According to the Dresden IFO Institute, the region has left the economic low point behind. For 2023, an increase in economic output is forecast by 0.3 percent and an increase of 1.3 percent for 2024. These developments are mainly supported by planned fiscal measures by the Federal Government, even if it is said that East Germany benefits less from these measures than the western federal states, such as the [Tagesspiegel] (https://www.tagesspiegel.de/berlin/Bodern-ifo-dresden--wirtschaft-erholt------- reported.

Particularly positive impulses are expected for the construction industry and the service industry, especially in the area of consumer services. Nevertheless, it should be noted that the armaments industry in the east plays a subordinate role and that the planned increase in military spending should hardly bring any direct advantages. While East Germany has been less export -dependent in the past, the labor market must accept current stagnant developments.

growth predicted

Especially in Saxony and Brandenburg, large investments from global players such as Tesla and Intel have been recorded. Tesla has already employed over 12,000 people in Grünheide, which leads to higher growth rates at short notice. In the long term it remains to be seen whether these settlements are really sustainable or whether it only occurs with take -away effects through government subsidies. A blessing or a curse? The answer to this question strongly depends on the development of the labor market and the population structure.

The job market under pressure

The labor market in East Germany faces major challenges. The IFO Institute predicts a decline of 0.1 percent for 2025, followed by a marginal increase of 0.2 percent a year later. These stagnating developments are due to unfavorable demographic conditions and the existing shortage of skilled workers. Depending on young people and the aging of the population are other problems that need to be addressed, according to an assessment of ZDF.

summarized East Germany in recent years, but has been a remarkable development, but the region continues to have large hurdles. It remains to be seen whether the region can actually act as a motor of the all -German economy. With a share of just 16 percent in all -German GDP, the question of long -term competitiveness and the potential for sustainable growth is more than ever relevant.