Income and economic differences between East and West Germany remain

Incomes in East and West Germany still show clear differences 36 years after German reunification. Last year, households in the five new federal states and Berlin had an average of 7,247 euros less net at their disposal than in West Germany, as the newspapers of the Funke media group report, citing figures from the Federal Statistical Office. In eastern Germany the income in 2025 was 42,259 euros and in the west it was 49,506 euros.

This further widens the gap in income between East and West. According to the data, in 2024 East German households had 7,080 euros less to spend net than West German households. In 2023 the gap was 6,979 euros.

The numbers refer to all types of income of citizens. In addition to wages, pensions as well as rental and capital income are also taken into account, which are usually higher in the West than in the East. Taxes, social contributions and regular money transfers between private households are deducted. According to the Funke newspapers, the BSW party requested the data from the statistics authority.

The average disposable net income per household was lowest in Saxony-Anhalt last year at 38,284 euros, and the second lowest was in Saxony at 39,500 euros. Bavaria performs best with an average disposable net household income of 53,067 euros, followed by Baden-Württemberg with 51,923 euros and Hesse with 49,538 euros.

Economic convergence stalled

The economy in the East also continues to lag behind the economy in the West, shows an unpublished study by the German Economic Institute (IW), which is available to the Rheinische Post. In 2025, the economy of the five eastern German states would only reach 79 percent of the western level. In the previous year it was around 78 percent.

The numbers refer to the so-called IW uniform index, which shows the catch-up process between the East and the West since 1990. In addition to economic output per capita, it takes into account productivity development, the economy's capital stock, the proportion of highly qualified people in research and development, labor force participation and the unemployment and self-employment rates.

According to the study, East Germany is falling behind or not making any progress in several indicators. For example, labor force participation in the East is falling, which last year - measured in relation to the total population - was only 85 percent in the East. This is a step backwards compared to 2010, when, according to the IW index, labor force participation in the East had reached almost 89 percent of the level in the West.

Investment has also stalled in the east, the data shows. When it comes to the value of all machines, factories, roads and buildings per capita, the East has barely caught up for 15 years, the report says.