East Germany also benefits from higher foreign demand – Implications of the Joint Economic Forecast Autumn 2026 and official regional data for the East German economy
The Joint Economic Forecast Project Group notes in its Autumn Report that the recovery of the German economy is stronger than anticipated in the spring report, even though high energy prices and structural problems continue to weigh on economic activity. In addition, the summer revision of the national accounts by the Federal Statistical Office has raised the level of economic output. As a result, the recessions of 2023 and 2024 appear less severe than previously reported. For the German states, and hence for East Germany, this revision will not be incorporated until next year.
The current recovery is being driven to a considerable extent by stronger foreign demand. “East Germany is benefiting from this as well, albeit to a lesser degree, since export-oriented industries account for a smaller share of economic activity than in West Germany,” says Oliver Holtemöller, Head of the Department Macroeconomics and Vice President at the IWH. Thus, output in Germany as a whole was 0.9% higher in the first half of 2026 than a year earlier, compared with only 0.5% in East Germany. In Saxony and Thuringia, output even declined by 0.3% and 0.8%, respectively. In Berlin, growth matched the national average at 0.9%, while Brandenburg recorded a stronger increase of 1.4% and growth in Saxony-Anhalt was, with 0.6%, somewhat weaker.
“By contrast, the temporary drag on output in the third quarter projected by the institutes as a result of low water levels on the Rhine affects only the West German economy,” says Oliver Holtemöller. Overall, the East German economy is expected to grow by 0.9% in 2026, 0.4 percentage points less than the German economy as a whole. Thereafter, output in East Germany is likely to expand at a pace broadly similar to that of Germany overall, rising by 0.9% in 2027 and by 0.4% in 2028. The unemployment rate in East Germany is projected to average 7.9% in 2026, before falling to 7.7% in 2027 and 7.3% in 2028.
Joint Economic Forecast, Autumn 2026 Report (in German):
Joint Economic Forecast: Aufschwung mit Strukturproblemen – Finanzpolitik auf Abwegen. Halle (Saale), September 2026.
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Aufschwung mit Strukturproblemen – Finanzpolitik auf Abwegen
in: Dienstleistungsauftrag des Bundesministeriums für Wirtschaft und Energie, 2, 2026
Abstract
Die deutsche Wirtschaft ist seit Ende 2025 im Aufschwung. Die Erholung fällt stärker aus als noch im Frühjahr erwartet, bleibt aber schwach. Die führenden Wirtschaftsforschungsinstitute erwarten für das laufende Jahr ein BIP-Plus von 1,3% und für die beiden folgenden Jahre von 1,1% bzw. 0,4%. Gegenüber dem Frühjahr wurde die Prognose für 2026 um 0,7 und für 2027 um 0,2 Prozentpunkte angehoben. Die Wirtschaft hat sich robuster entwickelt als erwartet. Der Aufschwung steht jedoch auf einem schmalen Fundament, denn hohe Energiepreise und Strukturprobleme belasten. Im laufenden Quartal bremst zudem Niedrigwasser die Aktivität vorübergehend. Das staatliche Defizit nimmt weiter zu, sodass sich ein wachsender Konsolidierungsbedarf aufstaut.
