The successes of German populist parties in Saxony and Thuringia could hurt the economy, according to the Ifo Institute

Brussels–German economists surveyed by the Ifo Institute suggest that the expected electoral successes of Alternative für Deutschland (AfD), the far-right populist party, and of Bündnis Sahra Wagenknecht (BSW), another populist party of the far-left, in Saxony and Thuringia will negatively impact German economic development.

The panel comprising 185 economics professors painted a clear picture: for Saxony, 67 percent of respondents expect a negative impact on economic development after state elections, while for Thuringia, the percentage rises to 74 percent. The percentages of those expecting a neutral impact are lower, and only a narrow minority expects a positive effect. “The impact of the BSW’s electoral success on economic development is rated slightly less negative than that of the AfD,” says Aaron Günther, a researcher at Ifo. Analyzing both, most economists predict the BSW outcome will adversely affect companies’ investment decisions, while for AfD, they fear a loss of attractiveness to skilled workers.

German economists fear that “the popularity of the radical parties will severely damage the economic position,” said Niklas Potrafke, director of the Ifo Center for Public Finance and Economic Policy, such that this “should be a warning bell for the population.”

The panel’s viewpoint and the concerns it expressed contrast sharply with the will of the German population, which increasingly favors radical, ultra-nationalist, and anti-Europeanist forces, especially on the far right. The upcoming polls are in Brandenburg on Sept. 22, and according to the latest projections, the AfD is leading with 28.6 percent, followed by the SPD, the German Social Democratic Party, and then the BSW.