Economic researchers expect unemployment to rise in 2020

Unemployment is expected to rise in Germany in 2020, bucking the trend of recent years.

In its economic forecast published on Thursday, the Macroeconomic Policy Institute (IMK) of the Hans Boeckler Foundation forecasts a year-on-year rise in the number of unemployed of around 30,000.

The IMK – which is linked to the German Confederation of Trade Unions – says that represents a rise in the annual average unemployment rate from  5 per cent in 2019 to 5.1 per cent next year.

The researchers expect the gross domestic product to rise by only 0.5 per cent in 2019 and by 0.8 per cent in 2020.

The fewer number of public holidays in Germany next year will play an important role. German public holidays that fall on weekends are not carried over to weekdays.

Without the larger number of working days GDP would increase by only 0.4 per cent in 2020, the researchers believe.

The IMK says Germany is feeling the effects of international trade conflicts, slower economic development in China, and the continuing uncertainty about the actual form of Brexit particularly strongly.

Nevertheless Sebastian Dullien, the IMK’s scientific director, remains cautiously optimistic. “It looks as if the German economy could escape this downturn with just a black eye,” he said, “but at the same time, there are currently few signs of a rapid recovery.”

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