After two difficult years, the East German economy is getting back on track more slowly than expected, according to the Dresden Ifo Institute. Economic output is expected to increase by 0.4 percent in 2025 and 0.7 percent in the coming year, according to this year's winter forecast. In the summer, the experts had still expected gross domestic product to grow by 1.3 percent in 2026.
The economists cited demographic change and the shortage of skilled workers as the reason for the weaker recovery. The effect of the German government's planned economic measures would be noticeably curbed. Stimulus is expected above all for the construction industry and service providers.
In Saxony, economic output will almost stagnate this year, with a slight increase of 0.1 percent, they said. An increase of 0.6 percent is expected for the coming year.
