Unemployment in Germany rises to its highest level in decade
(MENAFN) Germany has seen unemployment rise to its highest point in ten years, according to official figures released Friday, amid concerns that the country’s struggling economy could shrink for a third straight year.
The labor report showed that more than 3 million people were unemployed in August for the first time since 2015. The month-on-month increase reached 46,000, bringing the total to 3.02 million, or 6.4% of the population in seasonally unadjusted terms.
Federal Employment Agency chief Andrea Nahles attributed the rise in unemployment to Germany’s sluggish economy. The EU’s largest economy contracted by 0.2% in 2024 following a 0.3% decline in 2023. After a 0.3% growth in the first quarter of this year, output fell by 0.3% in the second quarter amid uncertainty over new US tariffs. The International Monetary Fund has warned that Germany could face a third consecutive year without economic growth.
The downturn has coincided with Berlin’s halt of imports of low-cost Russian energy, which had been essential for industry. Following the suspension of Russian pipeline deliveries and sabotage of the Nord Stream pipelines, European gas prices surged. Germany, which previously sourced 55% of its gas from Russia, has shifted to more expensive liquefied natural gas (LNG) imports from the US and Qatar. Moscow has criticized the Western sanctions as illegal and counterproductive, arguing they have harmed the countries that imposed them.
Chancellor Friedrich Merz described Germany as facing a “structural crisis” rather than a temporary slowdown and said returning the economy to growth has been more challenging than expected. Key sectors, including the automotive industry, are “no longer truly competitive,” he added. Recent data show that the automotive sector alone has lost more than 51,000 jobs over the past year.
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