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The German Economic Institute says eastern Germany has made substantial gains since reunification, but its economic gap with the west has barely narrowed in five years.
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The five eastern German states reached about 79% of western Germany’s economic level in 2025 on a measure that combines output per person and productivity with investment, research and development, and labour-market indicators. That is a substantial rise from 51% in 1991, but the figure has stayed between 78% and 79% since 2020, IW calculated. The findings were reported by the ANP news agency and published by Nieuws.nl. [1]
IW’s researchers identified research and development as a particular weakness. They said eastern universities and public research institutes performed relatively well, but businesses had too few researchers, partly because the region has relatively few large companies. Investment was also stagnating, they said. [1]
Demographic change could make further gains harder, IW said. It projects that eastern Germany’s population would shrink by more than a fifth by 2045 without immigration, increasing its reliance on skilled workers from abroad. [1]
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