Germany’s economy shows growth in the first quarter, despite unemployment exceeding 3 million

In the first quarter of 2026, Germany’s economy saw growth, fueled by both consumption and exports; however, unemployment reached over 3 million in April.

In Q1 2026, Germany’s economy experienced a growth of 0.3%, surpassing analysts’ predictions of 0.2%. This growth was fueled by household consumption, government spending, and an increase in exports, as reported by official data.

Even with the stronger-than-anticipated growth, the nation still encounters economic pressure due to elevated energy costs associated with geopolitical tensions and persistent structural challenges in its export-driven model.

Inflation increased as well, with EU harmonized figures reaching 2.9% in April, driven by rising energy prices, which has heightened concerns regarding economic stability.

At the same time, unemployment increased beyond expectations, rising by 20,000 to hit 3.006 million in seasonally adjusted figures, surpassing a significant political benchmark. The unemployment rate held steady at 6.4%.

Andrea Nahles, head of the labor office, stated that there are still no definitive indicators of recovery in the labor market, emphasizing that the typical spring improvement is notably weak.

While the total count of unemployed individuals saw a slight decrease in unadjusted figures, it signifies the fourth consecutive month exceeding the 3 million mark, underscoring ongoing challenges in the labor market.

The government has revised its 2026 growth forecast down to 0.5%, while also projecting an increase in inflation in the years ahead.