The number of unemployed people in Germany would rise by 440,000 this year due to the COVID-19 crisis before falling again by 100,000 in 2021, according to a forecast published by the Institute for Employment Research (IAB) on Friday.
Germany’s labor market had come under “massive pressure,” but the number of layoffs remained comparatively limited, said Enzo Weber, a researcher at IAB.
IAB expected real gross domestic product in Germany to shrink by 5.2 percent in 2020 before partially recovering by 3.2 percent in the following year.
The largest part of job losses (230,000) would occur in trade, transport as well as in the hospitality sector, according to IAB. Other services, including all of those related to sports, cultural events and recreation, were forecast to cut 110,000 jobs.
Employment growth was only expected for public services, education and the health sector, creating 380,000 new jobs over the next two years.
In relation to the size of the industry, the increase was the highest in the information and communication sector, according to IAB.
“This positive development is linked to the trend towards economy 4.0, the digitization, and networking of production and service processes,” said Weber. “In addition, the COVID-19 pandemic will further strengthen digitization processes, particularly in the field of communication.”