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Germany – Economists expect unemployment rate to increase again in 2012

05 January 2012

Despite the positive developments in the German labour market, which has just seen the lowest number of unemployed people in the country’s history, economic analysts believe that the national unemployment rate will rise again in 2012. 

Gustav Horn, director of the union-Institute for Macroeconomic Policy(IMK) told the Financial Times Deutschland, "the positive trends are not likely to continue in 2012." He expects unemployment figures to rise in the first half of the year although “the unemployment rate is not likely to fall further at first," Christian Melzer, an economist at Deka Bank said. 

Experts from the Deutsche Bank also fear that there will be an early end to the German “job miracle.” Other economists from Citigroup and Union Investment predict the number of unemployed people in Germany to reach an average of 3.03 million this year. 

This seems to contradict forecasts of the German government which remains cautious, but optimistic. Yet even the CEO of the Federal Employment Agency (BA), Frank-Jürgen Weise, warned that the monetary and fiscal risks still exist in 2012, making an increase in unemployment very likely. 


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