|Germany's unemployment rate rises to 5.4 percent|
Through data published today, Friday (29/7/2022), the German Labor Office said the number of people who had lost their jobs increased by 48,000 seasonally to 2.463 million people. Meanwhile, the unemployment rate in Germany rose to 5.4 percent. This number was higher than analysts' forecasts for an increase of 15,000 people. The German Labor Office said Germany's unemployment rate in July rose higher than expected, as Ukrainian refugees applied to find work in the country.
"Unemployment and underemployment increased more sharply in July than usual throughout the year. However, this was due to the registration of Ukrainian refugees," said Regional Head at the German Labor Office, Daniel Terzenbach, quoted by Reuters. Terzenbach added, the labor market in Germany is generally still stable. The increase in the number of unemployed in Germany, triggered by Ukrainian refugees who are currently being registered in job search centers. An estimated 900,000 Ukrainians have fled to Germany since Moscow invaded Kyiv in late February.
Under European Union (EU) directives, Ukrainian refugees will be granted protection status in the EU for up to three years, as well as access to health insurance and the labor market.
As many as 350,000 Ukrainians are currently registered to look for work in Germany. Munich, Germany-based economic research institute IFO conducted a survey of 1,000 Ukrainian refugees in June. In the survey, although as many as 90 percent of respondents wanted to find work in Germany, only half of them managed to find work. According to a survey conducted by IFO, lack of German and English language skills is the main barrier for Ukrainian refugees to find work. "Language skills are the most important challenge.
It's not only about German skills, but English as well." said IFO researcher Tetyana Panchenko. In addition to rising unemployment in Germany, the country's economy also stagnated in the second quarter of this year, triggered by the Ukraine war, pandemic and supply disruptions that pushed Europe's largest economy to the brink of contraction. Stagnation is an economic condition that is not growing and at the same time inflation is happening.
Stagnation is usually measured based on the growth of gross domestic product (GDP) over a certain period. Data from the German Statistical Office showed GDP was unchanged quarter-on-quarter. A Reuters poll of economists forecast growth of 0.1 percent. Household and government consumption in particular helped the German economy in the April to June period. "The difficult framework conditions in the global economy, including the COVID-19 pandemic, disruptions in supply chains and the war in Ukraine, are clearly reflected in short-term economic development," the German Statistical Office said in a statement.
German inflation rose unexpectedly in July, driven by an energy supply crisis caused by further reductions in Russian gas supplies. Germany's consumer price index increased by 8.5 percent this year. "The rise in inflation in the Harmonized Consumer Price Index (HICP) is a warning to the European Central Bank," said Carsten Brzeski, economist at ING Group.