Germany's Unemployment Peaks at 12-Year High Amid Economic Challenges

Germany faces its highest unemployment in twelve years, worsened by economic stagnation and structural challenges. Despite fiscal measures, a significant job market recovery is elusive. Labour shortages persist, but integration efforts for Syrian and Ukrainian refugees show progress.

Germany is grappling with its highest unemployment rate in twelve years, signaling a tough road ahead for Europe's largest economy, according to the latest data from the labour office. Unemployment figures rose by 161,000 in 2025, reaching 2.948 million, a peak not seen since 2013.

Labour office head Andrea Nahles revealed that while the economic trough might have been hit, a mild recovery is only expected by mid-2026, aided by government fiscal policies and a revival in construction. Yet, these measures won't suffice for a substantial decline in joblessness, she warned.

Despite rising unemployment, a skilled labour shortage persists due to demographic shifts, and the workforce is projected to shrink by 40,000 in 2026. Integration efforts for Syrian and Ukrainian refugees into the job market show promise, though gender disparities remain among Syrians.

(With inputs from agencies.)