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Germany’s ruling three-party coalition suffered a bitter electoral defeat in two key state elections this week, while the far-right Alternative for Germany (AfD) party saw a significant increase, a result that underlines its growing national power, Bloomberg reported.

Sunday’s elections saw the governing Social Democratic Party (SPD), the Greens and the Free Democratic Party lose a combined 12.2 percentage points in the western state of Hesse, and 6.6 percentage points in Bavaria.

The conservative opposition Christian Democratic Union (CDU) party secured 34.6 percent in Hesse, while its Bavarian sister party, the Christian Social Union, took 37 percent in the southern state.

Results also showed large gains for the AfD: It emerged as the second-strongest force in Hesse and the third-strongest in Bavaria.

Analysts said the results underscore the far-right party’s increasing popularity in Germany, as many voters grow frustrated with the country’s economic malaise, a surge in migration and the impact of the war in Ukraine.

The ruling coalition – headed by Chancellor Olaf Scholz of the SPD – has also been plagued by infighting, including disputes over the transition to a cleaner and more technologically advanced economy.

Scholz has also decided against implementing a stimulus program, despite previously distributing significant aid to mitigate the pandemic’s effects and the energy crisis due to embargos on Russia.

The government has also faced challenges in formulating effective policies to deal with an influx of refugees and migrants, leaving them vulnerable to criticism from opposition parties like the AfD and the conservative bloc, the news outlet wrote.