Compared to the previous year
Researchers expect 190,000 more unemployed
September 22, 2023, 3:37 p.m
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The German economic downturn is having an impact on the labor market, although less strongly than feared. According to a study, the number of unemployed is increasing compared to the previous year. Job opportunities are also currently poor.
The number of unemployed in Germany will be one in the current year compared to the previous year forecast increase by an average of 190,000. The Nuremberg Institute for Labor Market and Vocational Research (IAB) sees the cause as high inflation, rising interest rates and weak foreign demand. The Federal Employment Agency Research Institute in Nuremberg said the factors had dampened economic development. The Federal Agency put the number of unemployed in August at 2.7 million.
“The economic downturn has taken hold in Germany. This is also noticeable on the labor market, but given the weak economy it is holding up comparatively well,” said Enzo Weber, head of the IAB research department for forecasts and macroeconomic analysis. But the challenges are great – it’s about securing skilled workers, but also issues such as investment promotion and infrastructure.
“A comprehensive transformation program is therefore needed,” said Weber. In 2024, the number of unemployed will increase by another 60,000 people, according to the forecast. “The job prospects of the unemployed are currently as low as they were during Corona times,” explained the researchers. Accordingly, long-term unemployment is significantly above the pre-Corona level.
Nevertheless, the number of employees subject to social insurance contributions will increase: for 2023, the IAB expects a comparatively moderate increase of 250,000 to 34.76 million employees subject to social insurance contributions. The increase would therefore be half as much as in 2022. With regard to the economy, the IAB experts expect a decline in economic output of 0.6 percent in the current year. Next year, gross domestic product is expected to rise again by 1.1 percent. However, the prerequisite for this is a decline in inflation.