28.09.2026 • 29/2026
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
In 2026, economic activity in East Germany is expected to grow significantly, though somewhat less strongly than in Germany as a whole. In the years ahead, the Halle Institute for Economic Research (IWH) forecasts only minor differences in growth rates between East and West Germany. The East German economy is expected to grow by 0.9% in the current year (Germany as a whole: 1.3%). 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.
Oliver Holtemöller
Read
24.09.2026 • 28/2026
Joint Economic Forecast Autumn 2026: Recovery under structural stress – fiscal policy on slippery ground
The German economy has been recovering since the end of 2025. This recovery, although stronger than expected in spring, remains modest. The leading economic research institutes expect GDP growth of 1.3% for the current year and 1.1% and 0.4% for the following two years, respectively. Compared with the spring forecast, the outlook for 2026 has been revised upward by 0.7 and that for 2027 by 0.2 percentage points. “The economy has developed more robustly than expected. However, the recovery rests on a narrow foundation, as high energy prices and structural problems continue to weigh on economic activity,” says Oliver Holtemöller, Head of Macroeconomic Forecasting at the Halle Institute for Economic Research (IWH). In the current quarter, low water levels are also temporarily dampening economic activity. The government deficit continues to increase, leading to a growing need for fiscal consolidation.
Oliver Holtemöller
Read
Wahlerfolge rechtspopulistischer Parteien trotz positiver Arbeitsmarktentwicklung: Welche Rolle spielen ökonomische Faktoren?
Philipp Grunau, Florian Hoffmann, Mirko Titze
IWH Studies,
No. 1,
2026
Abstract
Der vorliegende Beitrag untersucht treibende Kräfte für rechtspopulistisches Wahlverhalten (gemessen über den Stimmenanteil der Partei Alternative für Deutschland) in Wahlen zum Deutschen Bundestag zwischen 2013 und 2025. Die Studie legt einen besonderen Fokus auf Determinanten mit Arbeitsmarktbezug, da sich diese mit Maßnahmen der Wirtschaftspolitik beeinflussen lassen.
Read article
Individualism and the Formation of Human Capital
Katharina Hartinger, Sven Resnjanskij, Jens Ruhose, Simon Wiederhold
Journal of the European Economic Association,
Vol. 24 (3),
2026
Abstract
More individualistic countries experience higher economic growth. We provide evidence for a human-capital-based explanation of the growth effects of individualism. Using data from the largest international adult skill assessment, we establish that individualism shapes human capital formation. We identify the effects of individualism by exploiting variation between migrants at the origin-country, origin-language, and person level. Migrants from more individualistic cultures have higher cognitive skills and larger skill gains over time. They also invest more in their skills over the life cycle, as they acquire more years of schooling and are more likely to participate in adult education activities. Individualism is more important in explaining adult skill formation than any other cultural trait that previous literature has emphasized. In the labor market, more individualistic migrants earn higher wages and are less often unemployed. We show that our results cannot be explained by selective migration or omitted origin-country variables.
Read article
01.04.2026 • 10/2026
Economic growth in East Germany slightly higher than in the West – Implications of the Joint Economic Forecast Spring 2026 and of new data for the East German economy
In 2025, the East German economy expanded by 0.4%, somewhat more than Germany as a whole (0.2%). For 2026, the Halle Institute for Economic Research (IWH) expects growth of 0.7% for East Germany (Germany: 0.6%). The unemployment rate is likely to amount to 7.9% in the current year, after 7.8% in 2025.
Oliver Holtemöller
Read
01.04.2026 • 9/2026
Energy price shock dampens recovery – inflation rises
Although the leading economic research institutes consider the German economy to be in a recovery phase following a downturn lasting several years, they nevertheless expect only a moderate increase in gross domestic product of 0.6% for 2026 and 0.9% for 2027. “The energy price shock triggered by the Iran war is hitting the recovery hard, but at the same time expansionary fiscal policy is bolstering the domestic economy and preventing a stronger slide,” says Timo Wollmershäuser, Head of Forecasts at the ifo Institute. The institutes estimate that the inflation rate will rise to an average of 2.8% in 2026 and 2.9% in 2027.
Oliver Holtemöller
Read
Economic Outlook
Joint Economic Forecast Autumn 2026 Recovery Under Structural Stress – Fiscal Policy on Slippery Ground September 24, 2026 The German economy has been recovering since the end of…
See page
Halle Institute for Economic Research (IWH) – Member of the Leibniz Association
Recovery under structural stress – fiscal policy on slippery ground The recovery of the German economy, although stronger than expected in spring, remains modest. In their joint…
See page
25.09.2025 • 29/2025
Fiscal policy will stimulate the East German economy next year – Economic Forecast Fall 2025 for the East German economy
In 2025, the economy in East Germany, as in Germany as a whole, is likely to do little more than stagnate. In the coming year, fiscal policy measures will stimulate the economy, but their effects are likely to be somewhat weaker than in Germany as a whole. The Halle Institute for Economic Research (IWH) expects the expansion rate of the East German economy in 2025 to be at 0.3%, slightly higher than that of Germany as a whole (0.2%). In both following years, it will rise to 1.1% and 1.2% respectively, which is slightly less than in the west.
Oliver Holtemöller
Read
Interviews
Quotations and Interviews It is not our style to abbreviate complex issues - but getting to the heart of the matter is. Below you will find quotes and interviews with IWH experts.…
See page