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German jobless tipped to rise further as recession bites

Business Materials 26 February 2009 07:05 (UTC +04:00)

German unemployment rose again in February, data released Thursday is forecast to show, as the global recession tightens its grip on Europe's biggest economy, dpa reported.

Analysts expect the country's labour office to say the dole queues swelled by a seasonally adjusted 60,000 this month after the numbers out of work rose by 56,000 in January.

This would result in the jobless rate edging up to 7.9 per cent, from 7.8 per cent in January, with both the labour office and economists predicting unemployment would rise further as Germany faces its biggest economic slowdown in 60 years.

The new German jobless data follows a series of announcements by companies about plans for layoffs and production cuts with the cold winter weather also likely to have impacted on the February labour market data.

Moreover, the signs of rising unemployment are emerging as Germany's political parties gear up for a national election set for next fall.

With the global economic slowdown gaining momentum, the German government predicts that GDP will shrink by 2.25 per cent this year.

But some analysts believe the 2009 contraction could be as much as 4 or even 5 per cent.

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