Residents of Berlin possess the lowest purchasing power among all German federal states. This is primarily attributed to high prices coupled with comparatively low incomes, as revealed by a study released on Saturday, April 12, 2026, from the Institute of the German Economy (IW) Cologne.
The capital’s real annual income averages approximately 24,600 Euros, positioning it last in a nationwide comparison. Berlin’s price level surpasses the national average by over six percent, further diminishing the effective spending capacity of its inhabitants.
Brandenburg also ranks low in purchasing power, securing the 12th position among the states. While incomes in Brandenburg are generally lower, the region benefits from proportionally lower prices, leading to an average real annual income of 27,000 Euros.
Within Brandenburg, a varied picture emerges. Frankfurt (Oder) records the lowest purchasing power, with a corrected regional income of 23,940 Euros. This figure represents the seventh-lowest among 400 districts and independent cities across Germany.
Conversely, residents in the Potsdam-Mittelmark district exhibit the highest purchasing power in Brandenburg, with a corrected income of 29,263 Euros. The study indicates significant regional disparities in economic well-being.
Across Germany, Bavaria leads the states in terms of price-adjusted regional purchasing power, with an average of 30,396 Euros. This is a result of the state’s highest nominal incomes offsetting its third-highest prices.
Niedersachsen ranks fourth nationally, with a real income of 28,658 Euros per capita. Bremen, on the other hand, occupies the second-to-last position with a real annual income of roughly 26,100 Euros, just above Berlin.
Hamburg experiences a notable drop in the ranking due to having the highest prices in the country, despite holding the third-highest nominal income. The city of Heilbronn in Baden-Württemberg leads all districts and independent cities with a real income of 39,424 Euros per capita.
The IW Cologne’s comprehensive evaluation utilizes extensive data on regional prices from German cities and districts, cross-referenced with income data from the Federal Statistical Office. Both datasets are based on figures from 2023, as more current, validated income statistics are not yet available.
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