Germany's new coalition government wants to bring in 400,000 skilled workers from abroad every year to address both demographic imbalances and labor shortages in key sectors that risk undermining the recovery from the coronavirus pandemic, Reuters reported.

"The shortage of skilled workers has become so serious by now that it is dramatically slowing down our economy," Christian Duerr, parliamentary leader of the co-governing Free Democrats (FDP), told business magazine WirtschaftsWoche.

"We can only get the problem of an ageing workforce under control with a modern immigration policy... We have to reach the mark of 400,000 skilled workers from abroad as quickly as possible," Duerr added.

Chancellor Olaf Scholz's Social Democrats, FDP Duerr's libertarians and environmentalists have agreed on measures such as a points system for professionals from outside the European Union and an increase in the national minimum wage to 12 euros an hour to get the job done in Germany more attractive.

The employer-focused German Economic Institute estimates that the workforce will fall by more than 300,000 people this year as more older workers retire than younger workers entering the labor market.

This gap is expected to widen to more than 650,000 people in 2029, bringing the accumulated shortage of people of working age to approximately 5 million in 2030. The number of working Germans rose to nearly 45 million last year despite the coronavirus pandemic.

After decades of low birth rates and uneven migration, the dwindling workforce is also a demographic time bomb for Germany's public pension system.