Frankfurt (Germany) (AFP) - German Chancellor Olaf Scholz’s troubled coalition lost support in two state elections Sunday seen as a crucial test halfway through its term, exit polls showed, while the resurgent far right made new gains.

All three parties in the coalition – Scholz’s centre-left SPD, the Greens and the liberal FDP – lost ground in southern Bavaria, the country’s biggest state, and western Hesse, according to the exit polls.

The far-right Alternative for Germany (AfD), which has enjoyed a surge in opinion poll ratings in recent times, won more support in both states, said the polls from broadcasters ZDF and ARD.

Nearly 14 million people were eligible to vote in the states, almost one in five of Germany’s electorate. The polls are seen as a crucial indicator of the population’s mood, with immigration and economic woes among key topics.

Interior Minister Nancy Faeser of the SPD, who ran as the party’s candidate for state premier in Hesse, said the results were a “very disappointing performance”.

The SPD lost several percentage points compared to the last state election in 2018, the exit polls showed.

In contrast, the AfD had cause for celebration, with co-leader Alice Weidel declaring the party was “on the right track”.

The elections were a “lesson for the (coalition) and a vote for change,” she added.

Official results will come in later Sunday.

The polls came after a torrid two years for Scholz’s government, which has had to contend with Russia’s invasion of Ukraine and the ensuing energy crisis, that plunged Germany into recession.

Adding to the problems, the chancellor’s coalition has been consumed by bitter infighting on issues ranging from climate laws to spending cuts.

Not helping the cause of the SPD and its coalition partners, both states are conservative strongholds, with Hesse ruled for 24 years by the main opposition CDU and Bavaria since 1957 by the CSU, headed by Markus Soeder.

The CDU maintained its first place in Hesse and extended its lead by several percentage points, according to the exit polls. For the past few years, the party had been governing Hesse in coalition with the Greens, and its state premier Boris Rhein is set to retain his post.

- Latest far-right win -

The AfD’s gains come after a string of recent local election triumphs, and will ring alarm bells anew about its growing popularity.

However it is not expected to enter government in either state up for grabs on Sunday, as its strongholds are in eastern Germany.

The AfD is traditionally an anti-immigration party but has also focused on attacking the coalition’s climate policies, driven by the Greens, that have been unpopular, with critics saying they could unduly burden households.

Immigration has emerged as a central theme for the elections as Germany – like elsewhere in Europe – faces a surge of new arrivals, reviving memories of a major influx in 2015.

The victory of the CSU – the sister party of the CDU – in Bavaria was widely expected and state premier Soeder is set to retain his post.

But with the exit polls showing the party’s worst result for decades, it could deal a blow to his ambitions to one day stand as a chancellor candidate.

Ahead of the vote, the state’s governing coalition was rocked by a scandal when Soeder’s deputy, Hubert Aiwanger, admitted to possessing Nazi pamphlets that were found in the schoolbag he used as a teenager in the late 1980s.

Aiwanger, leader of junior coalition partner the Free Voters, managed to hang on to his job.

And his party actually increased its share of the vote, according to the exit polls, after he claimed he was the victim of a “witch hunt”.

In contrast, the parties from Scholz’s coalition lost support in Bavaria and the FDP looks to have fallen below the threshold to get into the state parliament.

Analysts have predicted a poor result for the coalition could worsen tensions in government, particularly between the FDP and the other parties.