German unemployment to hit new high
5 January 2004
HAMBURG – The number of unemployed in Germany climbed to 4.31 million last month, the highest December figure since 1997, according to press reports.
Quoting initial estimates by the Federal Labour Office, Die Welt and Bild newspapers said the average for the year will come to 4.36 million, also the highest level since 1997.
The jobless total has risen by about 125,000 over November, largely as a result of seasonal influences, it was reported. Compared to December 2002, the jobless total is 85,000 higher.
However, the figures show the annual difference narrowing from month to month in 2003. In April, the figure was 471,100 over the corresponding month in 2002.
Although the Labour Office had previously predicted no reduction in jobless totals in 2004, it now believes there could be a slight fall, Die Welt reported.
Meanwhile economic experts are putting a dampener on hopes of a significant economic recovery for 2004 following watered down tax and labour reforms which came into effect on January 1.
Wolfgang Wiegard, chairman of the so-called “wise men” panel of economic experts, told Focus news magazine the compromises made on tax reforms meant gross domestic product would grow by 1.6 percent this year rather than the 1.7 percent previously forecast.
The Berlin-based DIW economic institute is meanwhile predicting growth of 1.4 percent, lower than previous forecasts, Der Spiegel news magazine reported.
DIW expert Gustav Horn told Focus magazine: “I am not expecting any significant growth impulse from the tax reforms.”
In the past few weeks, leading German economists have largely predicted a modest recovery for the country’s economy after a year of stagnation.
However, a survey of leading trade and industry associations published last week showed most felt the upswing would probably not translate into more jobs.
The German government is hoping its raft of labour and tax reforms from the new year will help get the economy moving and bring down the jobless rate of around 10 percent.
Subject: German news