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Finance

German unemployment expected to fall as economy gains pace, source says

Published by Global Banking and Finance Review

Posted on October 6, 2025

Featured image for article about Finance

By Holger Hansen

BERLIN (Reuters) -Germany's unemployment level is expected to fall in the two next years as the long-awaited recovery of Europe's biggest economy gathers pace, a source told Reuters on Monday, citing government forecasts.

The forecasts, first published by Reuters on Saturday, will be presented by the economy minister on Wednesday.

According to the new government projections, unemployment will edge down from 6.3% this year to 6.2% in 2026, before easing to 6.0% in 2027.

The number of unemployed people in Germany topped 3 million for the first time in a decade in August as Germany has struggled with a persistently weak economy since the onset of the COVID-19 pandemic, followed by Russia's full-scale invasion of Ukraine.

According to the government's projections, the number of unemployed is not expected to fall significantly to an annual average of around 2.8 million until 2027.

Germany's economy ministry revised its growth forecast for this year up to 0.2% from an earlier forecast of zero, the source told Reuters on Saturday.

The ministry now forecasts 1.3% growth for next year and 1.4% growth in 2027.

(Reporting by Holger Hansen, writing by Maria Martinez, editing by Miranda Murray)