Germany’s Economics Minister Robert Haveck said on Wednesday that the biggest challenge for Europe’s biggest economy will be constraining growth due to labor shortages, after Berlin cut its outlook for this year.
The government forecasts economic growth this year to be 0.2%, lower than previously expected as weak global demand, geopolitical uncertainty and persistently high inflation dampen hopes for a quick recovery. .3%.
Habeck said that with around 700,000 unfilled vacancies, Germany’s potential economic growth rate has fallen from around 2% in the 1980s to 0.7%, and if this problem is not resolved, it could further rise to 0.5%. He said it would decline.
“We don’t have enough manpower and we don’t have enough brainpower,” Habeck said at a press conference announcing the government’s 2024 economic report, adding that the number of unfilled vacancies due to the aging of the population will continue to increase.
According to official estimates, Germany’s aging population will lead to a shortage of 7 million skilled workers by 2035.
“It’s no longer just about skilled workers,” he added.
One of the solutions proposed in the government’s report was to provide financial incentives for people who want to work longer and more flexibly in retirement.
Habeck said another way to tackle the problem is to revisit unemployment benefits for some recipients.
More than half of Germans think it’s not worth working because of the government’s planned increase in welfare payments and child allowances, a survey in September found.
According to Habeck, around 2.6 million people in Germany between the ages of 20 and 30 do not have a professional qualification.
Welfare programs and aggressive labor market reforms introduced some 20 years ago are believed to have raised Germany’s competitiveness to internationally enviable levels after the 2003 and 2004 recession.
But Habeck said Germany would not be able to close the workforce gap without immigration, adding that expedited visa processing, expanded language courses and digital access to German companies abroad would help Germany become an immigrant-friendly country. He added that there is a need to
Berlin has passed several laws to make the country more attractive to migrant workers, including shortening the path to citizenship for foreigners, speeding up visa issuance and recognizing foreign qualifications in the job market. It has been introduced.
However, not all Germans are happy about the prospects for increased immigration. Support for the nationalist party Alternative for Germany (AfD) has reached an all-time high, making it the second most popular party in the country in opinion polls.
