Berlin needs foreign workers. Will Germany's far-right let that happen?

German third-quarter growth downgraded further in a new blow for Berlin's economy as it battles multiple headwinds with business sentiment on decline in November, the country’s Ifo Institute has said.

A shortfall in orders is hitting the German economy hard, the Munich-based Ifo Institute said.

The IFO Business Climate Index, which gauges sentiment among companies operating in the manufacturing, services, trade, and construction sectors, dropped to 85.7 points in November.

Last month, some 41.5 percent of companies reported a lack of orders, up from 39.4 percent in July, the institute said.

The rate is the highest since the 2009 financial crisis, it said.

Manpower shortages plague important sectors such as healthcare, services, and technology.

The only panacea for the German economy is to fulfil the labour shortages by importing foreign workers.

A study by the Bertelsmann Foundation has revealed that the German labour market needs 288,000 skilled workers every year to maintain economic development, indicating a high dependency on these workers.

But immigration is a divisive hot-button issue in the country, with the far right hoping to gain ground in upcoming legislative elections following the collapse of Germany's three-way coalition government.

The far-right AfD party has significantly increased its vote share in recent years by campaigning against migration, stoking fears of Muslims and immigrants.

Tackling chronic labour shortages

Germany will issue upwards of 10 percent more professional visas in 2024 after it relaxed some rules in a bid to tackle chronic labour shortages, the government has said.

With 1.34 million jobs vacant, last year's liberalisation of rules concerning the immigration of skilled workers addresses a critical shortage in Europe's largest economy, whose growth has spluttered in recent years.

Following the adoption of a points-based system inspired by Canada, 200,000 professional visas will be issued in 2024, a government statement said.

"We are working to attract the skilled workers and professionals that our economy has urgently needed for years," Interior Minister Nancy Faeser said.

The new points system means that foreigners who are not EU nationals will find it easier to enter the German labour market and possibly bring their families with them.

Knowledge of the German language, professional experience and age are among the criteria for collecting the points.

With an ageing population and an annual shortage of 400,000 workers, the reforms need to go further, Foreign Minister Annalena Baerbock said.

Germany's employment has grown by 1.6 million in five years, with 89 percent of those positions attributed to foreigners.