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Ifo Economic Forecast 19.12.2012

Economic Forecast for Eastern Germany and Saxony 2012/2013: Euro Crisis Almost Brings Overall Economic Development to a Standstill

The world economy has been steadily cooling down since mid-2011, which has led to a renewed intensification of the European debt crisis on the one hand, and is due to the restrictive monetary policy pursued by emerging economies on the other. This development has ultimately resulted in a clear deterioration in the economic situation in Eastern German and Saxon manufacturing. The overall economic dynamic has also slowed down strongly as a result. However, this does not mean that the economy of Eastern Germany (including Berlin) and Saxony is expected to slip into a recession. According to the current forecast of the Ifo Institute (Dresden branch), price-adjusted gross domestic product (GDP) in the Eastern German Länder looks set to increase by 0.2% in 2012 and by 0.5% in 2013; while economic activity looks set to pick up clearly over the course of the forthcoming year. In Saxony, which depends more strongly on international economic influences, economic development is expected to be slightly weaker than in Eastern Germany on the whole this year and slightly better next year.


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Prof. Dr. Joachim Ragnitz

Ifo Institute
Dresden Branch
Phone: +49(0)351/26476-17
Fax: +49(0)351/26476-20
Email: ragnitz @

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