German labour agency faces over 8 bln euro deficit in 2026, report says

The agency had assumed a deficit of just under 4 ‌billion euros in its 2026 budget planning but a weaker ‌labour market and downgraded economic outlook mean the gap is now expected to widen sharply, the report said. If the contribution rate for unemployment insurance ⁠remains unchanged, ​the labour ⁠agency would have to cover the shortfall through a government's loan.

Germany's Federal Employment Agency (BA) ​faces a deficit of ​more than €8 billion ‌euros ($9.3 billion) this ​year, more than twice the shortfall previously planned, according to a BA report ‌for the federal parliament's budget committee seen by Reuters on Tuesday. The agency had assumed a deficit of just under 4 ‌billion euros in its 2026 budget planning but a weaker ‌labour market and downgraded economic outlook mean the gap is now expected to widen sharply, the report said.

If the contribution rate for unemployment insurance ⁠remains unchanged, ​the labour ⁠agency would have to cover the shortfall through a government's loan. The budget committee ⁠is due to discuss the agency's financial outlook next week.

OUTLOOK UNTIL ​2030 CLOUDS OVER The labour agency also expects deficits in ⁠the coming years, with accumulated debt potentially rising to around 23 billion euros ⁠by ​2030.

The agency projects a deficit of 2.7 billion euros in 2030, based on the government's spring forecast, which ⁠assumes a significantly weaker economy and labour market than previously expected. While the ⁠government's autumn ⁠projection had forecast unemployment falling to 2.742 million by 2030, the current estimate is 2.828 million. ($1 = ‌0.8591 euros)