Economy and employment in Germany in 2021 - An overview

Are you wondering how Germany’s employment scene these days is? Your interest in the employment trends of Germany shows that you are one of the many international skilled workers who want to arrive in Germany on a Germany work visa.

The COVID-19 situation has a profound effect on the employment scene in Germany. Here, we will look at some of the notable developments in the German jobs scene so that you can decide and plan on your course to land a job there on a Germany employment visa.

The recovery of Germany from economic distress has been interrupted by the second wave of the COVID-19 pandemic. There’s a decline in GDP expected in the first quarter of 2021 following a stagnation in the quarter before.

However, with the vaccination campaign catching up, there’s hope for the pandemic to ease and the economic recovery to gain speed. Unlike 2020, the losses suffered economically are concentrated on retail trade and consumer-related service industries as of now.

Even while private consumer spending has increased compared to the beginning of the COVID-19 pandemic, the overall economic impact is expected to be much smaller. The most important reason for this is that the export business is on the path to recovery.

Also, there’s sustained relief visible for many companies owing to the availability of vaccines that are effective against COVID-19. So, there won’t be a major dip in investment.

Broadly, GDP is all set to pick up in a strong way. There will be growth rates of 3.7% in 2021 and 4.8% in 2022. This will follow the decline of 4.9% in 2020. The labor market’s recovery will however be a slower process.

It will only be in 2022 that employment rates will start picking up from where they are currently standing, which itself is a continuation of the employment rates of 2020. However, the effect of temporary factors could play its part in this increase in the employment rate. Hence, the inflation rate is expected to fall again in 2022.

Looking at the effect of the pandemic on public budgets, it can be seen that there have been added expenses incurred owing to the COVID-19, coupled with shortfalls in revenue. Due to these, the budget deficit in 2021 will return to over 4% on GDP. A decline in deficit to 1.3% is expected in 2022. The level of debt will be just under 70% then.

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