Germany Faces Rising Unemployment and Projected €4 Billion Deficit in Federal Labor Agency

Authorities consider increasing unemployment insurance contributions as jobless numbers climb to 6.4% in March 2025.

The Bundesagentur für Arbeit (BA) is projecting a financial deficit of €3-4 billion in 2025 due to surging unemployment rates.
Unemployment insurance contributions, currently at 2.6% of gross wages, may rise by 0.2 to 0.3 percentage points to address the shortfall.
Official statistics show 2.967 million people were unemployed in Germany in March 2025, an increase of 198,000 compared to the previous year.
The unemployment rate for March 2025 stood at 6.4%, reflecting continued economic pressures in Germany.
Earlier projections of a €1.5 billion reserve for the BA by the end of 2025 are now uncertain due to the worsening fiscal situation.