The German economy has once again proved its resilience. It literally rose like a phoenix from the ashes after being severely hit by the coronavirus-driven crisis. Almost all key economic indicators showed steady growth, exceeding economists' forecasts.
The government has achieved significant progress in combating unemployment caused by the coronavirus pandemic. Employment recovered much earlier than analysts had predicted. In late August, the economy added 53,000 new jobs. The employment rate has been growing for the fourth month in a row as enterprises hire new workers amid the rapid economic recovery after the lockdown. In general, unemployment fell to 5.5%, the lowest since March 2020. At that time, the country announced the introduction of coronavirus restrictions. Currently, the German authorities do not plan to impose a second lockdown despite the increase in the new coronavirus cases.
Therefore, the European Commission upwardly revised its outlook for the labor market to the highest level since the end of 2018 amid the improvement in key indicators. Official data provided by the Federal Employment Agency (BA) also showed an increase in demand for labor. Companies had rarely resorted to subsidies to pay wages. According to the German Institute for Economic Research, the number of firms that participated in the state program in July decreased to 1 million.
However, Germany is still dealing with problems in the supply chain for the manufacturing sector. In addition, inflation in the country has reached its highest rate since 2008 due to the rise in the cost of electricity.
