Germany Faces Rising Unemployment and Sluggish Economic Growth in 2025

Economic stagnation, labor shortages, and demographic challenges are driving job losses, with planned fiscal stimulus seen as key to recovery by year-end.

• Unemployment in Germany is projected to increase by 140,000 in 2025, reaching 2.92 million, according to the Institut für Arbeitsmarkt- und Berufsforschung (IAB).
• Overall employment is expected to decline by 40,000, while part-time roles drive a modest increase of 60,000 in social security-contributing jobs.
• Germany's economy is forecast to grow by only 0.2% in 2025, reflecting ongoing stagnation and limited recovery prospects.
• Labor shortages, particularly in technical fields, and an aging population are compounding long-term constraints on workforce growth.
• Planned fiscal stimulus packages are anticipated to stabilize the labor market and improve economic conditions by the end of the year.

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