Ifo Institute in Dresden Set to Close by 2027 Due to Funding Cuts

The Ifo Institute, known for its economic research in Eastern Germany, is planning to close its Dresden branch by mid-2027. This decision comes in light of unexpected funding cuts from the Saxon government, which cited the need for budgetary savings as the primary reason.

Since its establishment in 1993, the Dresden branch has played a crucial role in analyzing the economic landscape of Eastern Germany, particularly focusing on the economic conditions in Saxony. The institute has conducted extensive research on various topics, including how to support structural change in a socially responsible manner, the factors driving economic development in Saxony, and strategies for addressing current and future fiscal challenges. The impact of demographic change has also been a key area of focus for the 13 employees working at the branch.

Throughout its operational years, the Ifo Institute in Dresden has produced numerous reports and expert assessments for the Saxon government, other federal states, and various federal ministries. Additionally, it has consistently monitored the business climate in Eastern Germany through its business climate index, providing valuable insights into the corporate sentiment in the region.

Despite multiple discussions aimed at finding a viable financial solution, Ifo President stated that no sustainable future could be secured for the Dresden branch. This closure marks a significant reduction in economic research capabilities for the region, which has relied on the institute's expertise for over three decades.

The decision has raised concerns among local economists and policymakers, who fear that the absence of such a research facility could hinder the formulation of effective economic strategies in the future. The Ifo Institute's work has been instrumental in supporting evidence-based policymaking in Saxony and beyond.