Latest news with #DIHK
Gulf Today
6 days ago
- Business
- Gulf Today
German unemployment rises faster than expected in May
The number of people out of work in Germany rose at a faster pace than expected in May, labour office figures showed on Wednesday, putting pressure on a new government battling to wrench Europe's largest economy from a prolonged downturn. The office said the number of unemployed increased by 34,000 in seasonally adjusted terms to 2.96 million. Analysts polled by Reuters had expected a rise of 10,000. The number of unemployed people in Germany is approaching the 3 million mark for the first time in a decade. 'The current labour market figures show that we urgently need economic policy impulses that create growth,' German Labour Minister Baerbel Bas said. Economic malaise has put pressure on the job market even against a backdrop of long-term labour shortages, adding to pressure on conservative Chancellor Friedrich Merz, who has vowed to pull the economy out of a two-year decline. Tariffs announced by US President Donald Trump could deal a major blow to those efforts - possibly putting the German economy on track for a third straight year of recession for the first time in the country's post-war history. Hiring intentions in the service sector, however, offer a rare bright spot, said Marc Schattenberg, economist at Deutsche Bank. 'Especially if the trade conflict between the US and the EU is resolved soon, the German economy could grow slightly again this year,' Schattenberg said. 'That would finally give the labour market more tailwind.' The seasonally adjusted employment rate remained unchanged in May from the previous month at 6.3%, in line with a forecast by analysts in a Reuters poll. Excluding the pandemic, this is the highest level since December 2015. Pantheon Macroeconomics forecasts that the German unemployment rate will climb to closer to 6.5% over the coming months. 'The labour market is not getting the tailwind it needs for a trend reversal. Therefore, we expect unemployment figures to continue to rise in the summer,' said labour office head Andrea Nahles. There were 634,000 job openings in May, or 67,000 fewer than a year ago, showing a slowdown in labour demand, the labour office said. Meanwhile the German economy is expected to contract by 0.3 per cent this year, shrinking for a third consecutive year, the German Chamber of Commerce and Industry (DIHK) said on Tuesday, forecasting the longest period of weakness in Germany's post-war history. The risk of recession persists, the DIHK said, but following a promising first quarter, its projection was more optimistic than the previously forecast 0.5 per cent contraction published in February. Economic growth in the first quarter was significantly stronger-than-expected due to export and industry frontloading ahead of US tariffs. Germany had been expected to be badly affected by tariffs due to its export-oriented economy. The US was Germany's biggest trading partner in 2024 with two-way goods trade totalling 253 billion euros ($288.02 billion). The DIHK forecasts German exports to decline by 2.5% in 2025, also contracting for a third consecutive year. A DIHK survey, conducted among 23,000 companies from all sectors and regions, showed that 29% of them see exports falling over the next 12 months, while only 19% expect exports to rise. The German economy continues to struggle with pessimistic business sentiment, standing at 94.9 in the latest survey. Values under 100 mean that there are more pessimists than optimists. 'Businesses are still waiting for signals of progress,' DIHK managing director Helena Melnikov said, calling for urgent political action. 'Positive impulses for the economy must come quickly, before the summer break, businesses are waiting for them,' she said. Melnikov added that because the survey took place between the end of March and the end of April - before the new government was in office - it would serve as a basis to interpret businesses' response to the coalition's early economic measures. Reviving sluggish growth will be one of the main tasks of the coalition of conservatives and Social Democrats. Economic policy conditions were identified as the largest business risk, with 59% of companies citing them as a major obstacle. High labour costs and domestic demand also pose significant challenges, the survey showed. Nearly one-third of companies planned to reduce investments. The German government on Wednesday proposed a law to extend rent controls in an effort to make housing more affordable, following through on a key pledge of the new coalition government under Chancellor Friedrich Merz. The measure, which extends the price controls by another four years through 2029, is fiercely opposed by property industry executives. Reuters
Qatar Tribune
27-05-2025
- Business
- Qatar Tribune
Germany earmarks $125 billion for 2025 to revive sluggish economy
Agencies The German government is earmarking some 110 billion euros ($125 billion) in public investments this year to revive the nation's sluggish economy, the country's new finance minister, Lars Klingbeil, said on Tuesday. 'We want there to be tangible changes for people who work hard and who rightly expect our country to function better,' said Klingbeil, who also serves as vice chancellor in Chancellor Friedrich Merz's new government. The Finance Ministry said investments are to increase by almost 50% in 2025, compared to the previous year, the report by the Deutsche Presse-Agentur (dpa) said. The investments are to come from Germany's core budget, as well as a 500-billion-euro package that was passed in March. 'At the same time, we will implement comprehensive structural reforms and continue to strictly consolidate the budget,' Klingbeil said in an emailed statement to Reuters. Germany's new coalition government plans a surge in public spending targeting defense and infrastructure, hoping to close gaps in long-neglected areas of investment while hauling the economy out of a two-year downturn. 'My top priority is to put Germany on a growth path now. This is how we boost the economy and secure jobs,' said landmark 500-billion-euro package was rushed through the German parliament following February's parliamentary elections by the incoming coalition partners – Merz's Christian Democrats (CDU), the Bavaria-only Christian Social Union (CSU) and Klingbeil's center-left Social Democratic Party (SPD). It allowed the new administration to circumvent strict rules on borrowing and deficit spending to invest in defense, infrastructure and climate protection measures. The package required votes from the Greens, who secured a promise for 100 billion euros of the pot to be transferred to the government's Climate and Transformation Fund, dedicated to climate spending. However, the Greens – now in the opposition – have warned that the government could use the special fund to plug budgetary holes and finance expensive giveaways promised during the election campaign. On Tuesday, Klingbeil announced comprehensive structural reforms to cut budgetary spending. The government is currently preparing a draft of the 2025 budget, which the cabinet is due to approve on June 25. The announcement by the finance minister comes as a new projection by the German Chamber of Commerce and Industry (DIHK) on Tuesday showed the German economy is expected to contract by 0.3% this year, shrinking for a third consecutive year. The risk of recession persists, the DIHK said, but following a promising first quarter, its projection was more optimistic than the previously forecast 0.5% contraction published in February. Economic growth in the first quarter was significantly stronger than expected due to export and industry frontloading ahead of U.S. tariffs. Germany had been expected to be badly affected by tariffs due to its export-oriented economy. The U.S. was Germany's biggest trading partner in 2024, with two-way goods trade totaling 253 billion euros. The DIHK forecasts German exports to decline by 2.5% in 2025, also contracting for a third consecutive year. A DIHK survey, conducted among 23,000 companies from all sectors and regions, showed that 29% of them see exports falling over the next 12 months, while only 19% expect exports to rise. The German economy continues to struggle with pessimistic business sentiment, standing at 94.9 in the latest survey. Values under 100 mean that there are more pessimists than optimists. 'Businesses are still waiting for signals of progress,' DIHK managing director Helena Melnikov said, calling for urgent political action.
Yahoo
27-05-2025
- Business
- Yahoo
German businesses warn that economic upturn 'not yet in sight'
Germany's Chamber of Industry and Commerce (DIHK) does not foresee a rapid recovery of the German economy as it struggles to create growth, and called on the new government to make reforms. "The economic upturn that we all want and that our country needs is not yet in sight," said DIHK chief executive Helena Melnikov in Berlin on Tuesday. Fears are growing that, for the first time in Germany's post-war history, economic output will decline for the third year in a row. The DIHK continues to expect a decline in gross domestic product (GDP) of 0.3% for the current year. This makes the organization more pessimistic than the German government, which expects GDP to stagnate in 2025. Melnikov referred to the results of a new DIHK economic survey of more than 23,000 companies which found that the mood remained predominantly poor. Only a quarter of companies rated their situation as good, and business expectations remained pessimistic. According to the survey, companies see the economic policy framework, weak domestic demand, high labour costs, rising social security contributions and high energy and raw material prices as the greatest risks to their bottom line. Added to this is the unpredictable US tariff policy. Melnikov said comprehensive structural reforms, such as faster planning and approval procedures, are necessary to ensure that the planned debt-financed government fund of €500 billion ($570 billion) for investment in infrastructure and climate change measures can have full effect. The new German government has announced a comprehensive package of measures to be implemented before the summer recess to ease the burden on companies. These include a reduction in electricity tax and better depreciation conditions to stimulate investment. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Free Malaysia Today
27-05-2025
- Business
- Free Malaysia Today
German economy expected to contract by 0.3% this year, says DIHK
The US was Germany's biggest trading partner in 2024, with two-way goods trade totalling US$288.02 billion. (EPA Images pic) BERLIN : The German economy is expected to contract by 0.3% this year, shrinking for a third consecutive year, the German Chamber of Commerce and Industry (DIHK) said today, forecasting the longest period of weakness in Germany's post-war history. 'The risk of recession persists,' the DIHK said, but following a promising first quarter, its forecast was more optimistic than the previously forecast 0.5% contraction published in February. Economic growth in the first quarter was significantly stronger than expected due to export and industry frontloading ahead of US tariffs. Germany had been expected to be badly affected by tariffs due to its export-oriented economy. The US was Germany's biggest trading partner in 2024, with two-way goods trade totalling €253 billion (US$288.02 billion). The DIHK forecasts German exports to decline by 2.5% in 2025, also contracting for a third consecutive year. A DIHK survey, conducted among 23,000 companies from all sectors and regions, showed that 29% of the companies expect exports to fall over the next 12 months, while only 19% expect exports to rise.
Reuters
27-05-2025
- Business
- Reuters
German economy expected to contract by 0.3% this year, DIHK says
BERLIN, May 27 (Reuters) - The German economy is expected to contract by 0.3% this year, shrinking for a third consecutive year, the German Chamber of Commerce and Industry (DIHK) said on Tuesday, forecasting the longest period of weakness in Germany's post-war history. The risk of recession persists, the DIHK said, but following a promising first quarter, its forecast was more optimistic than the previously forecast 0.5% contraction published in February. Economic growth in the first quarter was significantly stronger than expected due to export and industry frontloading ahead of U.S. tariffs. Germany had been expected to be badly affected by tariffs due to its export-oriented economy. The U.S. was Germany's biggest trading partner in 2024 with two-way goods trade totalling 253 billion euros ($288.02 billion). The DIHK forecasts German exports to decline by 2.5% in 2025, also contracting for a third consecutive year. A DIHK survey, conducted among 23,000 companies from all sectors and regions, showed that 29% of the companies expect exports to fall over the next 12 months, while only 19% expect exports to rise. ($1 = 0.8784 euros)
