Germany’s Jobless Rate Climbs to Decade High

(MENAFN) Germany’s unemployment rate surged to its highest point in ten years, official data released Friday reveals, highlighting escalating risks of a third straight year of economic contraction for Europe’s largest economy.

In August, the number of unemployed individuals climbed above 3 million for the first time since 2015. The monthly rise totaled 46,000, bringing the total to 3.02 million on a seasonally unadjusted basis, which represents 6.4% of the workforce.

Andrea Nahles, head of the Federal Employment Agency, attributed the worsening labor market conditions to Germany’s faltering economy. The country’s GDP shrank by 0.2% in 2024 following a 0.3% contraction in 2023. After a brief 0.3% growth in the first quarter, output declined by 0.3% in the second quarter amid growing concerns about new US tariffs. The International Monetary Fund recently cautioned that Germany could experience a third consecutive year without economic growth.

Germany’s downturn coincides with Berlin’s halt on importing inexpensive Russian energy critical to its industrial base. Following the near cessation of Russian pipeline deliveries and sabotage of the Nord Stream pipelines, European gas prices surged. Previously, Germany sourced 55% of its gas from Russia but has since transitioned to more expensive liquefied natural gas (LNG) imports from the US and Qatar.

Moscow condemned Western sanctions as “illegal and ineffective,” arguing they have ultimately harmed the imposing countries themselves.

Chancellor Friedrich Merz declared last week that Germany is confronting a “structural crisis” rather than a temporary “weakness,” acknowledging the challenge in steering the economy back to growth. He warned that core sectors such as automotive manufacturing are “no longer truly competitive.”

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