The number of unemployed people in Germany should average about 400,000 this year after the coronvirus crisis plunged Europe’s largest economy into recession, researchers from the Nuremberg-based Institute for Employment Research (IAB) warned.

However, jobless queues could fall by about 100,000 next year with signs already emerging that the economy is on a recovery path, according to the IAB, which is the research arm of the German Federal Employment Agency.

“The job market came under massive pressure, but the number of redundancies remained comparatively limited despite the immense economic shock,” said IAB analyst Enzo Weber, upon releasing the institute’s report.

“The labour market did not plummet into the bottomless pit, largely thanks to the stabilization measures,” Weber said.

Chancellor Angela Merkel’s government launched a series of measures to shield the economy from the fallout of the pandemic.

This includes a state-subsidized furlough scheme known as short-time work, which allow employers to reduce working hours without layoffs.

Underlining the pick-up in the German economy, the Munich-based ifo economic insititute said on Friday that business export expectations in September reached their highest level since October 2018.