State Of Construction Industry
State Of Construction Industry

In the 30th year after the fall of the Berlin Wall, German economists no longer believed that East Germany would catch up any further economically with the West, according to a survey published by the Munich-based Institute for Economic Research (Ifo) on Thursday.

According to the Ifo survey, 69 percent of economic experts answered “No” to the question of whether East Germany would reach West German economic levels within the next few years or decades.

The economists cited “structural disadvantages of the East, poorer demographic development and a different industrial structure as reasons” as some of the main reasons for the continuing disparity.

“It seems to be a vicious circle: many well-educated young people see no prospects in the East, apart from exceptions like Leipzig, Dresden or Jena, and go to the West,” said Niklas Potrafke, head of the Ifo Center for Public Finance and Political Economy.

“Now they are missing in the East, which hampers economic development there and instead many conurbations are flourishing in the West,” Potrafke added.

According to the Ifo survey published on Thursday, only 19 percent of German economic experts believed that there would be an approximation of economic prosperity between the east and west of the country.

“Despite the trend towards equal wages and pensions and unemployment rates in East and West Germany, these figures show that East Germany is simply not catching up with West Germany,” according to Ifo.

Skepticism was also evident in the answers to the question of how long it would take for East Germany to catch up with the West, with 61 percent of German economic experts saw “neither complete convergence in the medium nor long term”.

According to the German government’s 2018 annual report on the state of German unity, the economic power per East German inhabitant was only 73.2 percent of the West German level in 2017.

In 2017, gross domestic product (GDP) growth in East Germany also lagged behind West Germany, with 1.9 percent and 2.3 percent growth, respectively, according to the German government. Enditem

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