BERLIN, Jan. 3 (Xinhua) -- Germany's annual average unemployment rate in 2023 rose by 0.4 percentage points year-on-year to 5.7 percent, the Federal Employment Agency (BA) said on Wednesday.

       Both unemployment and underemployment "rose significantly on an annual average," BA said. Compared to the previous year, the number of unemployed people in Germany increased by 191,000 to just over 2.6 million.

       "Looking back at 2023, we can see that the weak economy has not left the labor market unaffected," said Andrea Nahles, chairwoman of BA's executive board, at a monthly press conference.

       Leading economic institutes expect Germany's economy to contract slightly in 2023. For 2024 and 2025, the Organisation for Economic Cooperation and Development (OECD) forecast growth of 0.6 percent and 1.2 percent, respectively.

       With an annual average of 761,000 registered unfilled positions, demand for labor in 2023 was slightly lower than in 2022. The reported figures were noticeably weaker from the second half of 2022 onwards. Nevertheless, "demand for staff remains high in a long-term comparison," BA said.

       Despite the weak economic background, the labor market is "still holding up well," Nahles said. Germany's workforce was larger than ever.

       According to provisional figures, the total number of people in employment rose to a new record of 45.9 million last year. "The immigration of foreign labor was one of the reasons for the increase in employment in 2023," the Federal Statistical Office (Destatis) said on Tuesday.

       StarPicks

       Malaysia ‘going beyond’ with leadership on climate action

       Europe's largest economy is suffering from a massive shortage of skilled workers in many professions, making it economically dependent on immigration. The German government has initiated various legislative measures to make it easier for skilled workers to access the labor market and stay in the country.

       The Kiel Institute for the World Economy (IfW Kiel) said in its forecast in mid-December 2023 that Germany's unemployment rate is expected to rise to 5.8 percent in 2024, before falling again slightly to 5.6 percent in 2025.