High inflation, rising interest rates and weak foreign demand: According to the IAB, these are factors that are having an impact on the labor market. What are the future prospects?
According to a forecast, the number of unemployed in Germany will increase by an average of 190,000 this year compared to the previous year. The Nuremberg Institute for Labor Market and Occupational Research (IAB) sees the cause as high inflation, rising interest rates and weak foreign demand.
The factors have dampened economic development, the Federal Employment Agency’s research institute announced on Friday in Nuremberg. 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.
IAB: Low job opportunities
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 economic output to decline by 0.6 percent this 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.
Source: Stern
