Support for Trump

Economic crises strengthen populist parties

The future US President Donald Trump

(Bild: AP)

High inflation and a weak economy strengthen populist and extremist parties. This is the result of a new study by the Kiel Institute for the World Economy (IfW). This effect explains some of the popularity of US President-elect Donald Trump, the right-wing AfD and the left-wing populist BSW alliance in Germany.

In the new elections to the German Bundestag in February, the economic crisis of recent years is likely to be responsible for around two percentage points of the vote share of populist parties. If wage increases at least compensate for inflation, the increase in votes (plus 1.3 percentage points) will be lower, it is said.

"Extreme parties benefit when price increases are higher than expected and employees and other economic actors have not had the opportunity to prepare for inflation through appropriate wage increases," said Jonathan Federl from the IfW. He and his team analyzed 365 elections in 18 industrialized countries between 1948 and 2023.

Extreme parties benefit when price increases are higher than expected.

Jonathan Federl, Institut für Weltwirtschaft

Inflation increases dissatisfaction
One of the key findings: Unexpectedly rapid increases in consumer prices not only have consequences for voting behavior, but also increase dissatisfaction among the population. For example, there are eight percent more demonstrations when actual inflation is one percentage point higher than expected.

Positive surprises, on the other hand, reduce the popularity of populist and extremist parties, according to the study. "The results shed light on the upcoming early federal elections (February 23, 2025, note), as inflation and growth in Germany have deviated significantly from expectations in the last three years," said Federle. Support for radical parties is likely to have increased on both the left and the right.