East German Economy

The East German economy was centrally planned by the government, meaning it controlled production, prices, and resources rather than relying on supply and demand like in market economies. Focused on heavy industry, manufacturing, and military goods, it aimed for rapid industrial growth. However, inefficiencies, lack of innovation, and limited consumer choices led to economic stagnation. Despite significant state investment, the economy struggled with low productivity and shortages. After reunification with West Germany in 1990, East Germany shifted to a market economy, facing challenges adapting to new competition and economic structures.