Germany's unemployment rate will rise further this year, according to a new government report.

Labor minister Ursula von der Leyen has suggested that Europe's largest economy will witness the number of unemployed individuals rise close to four million by the end of 2010.

In January, Germany's unadjusted unemployment rate rose from 7.8 per cent in December to 8.6 per cent of the available labor market, which is equivalent to 3.617 million people, AFP reported.

Ms von der Leyen suggested that Germany's economy, which suffered its worst post-war recession in 2009, will face "several difficult months".

Speaking to the Bild am Sonntag newspaper, she said: "We could see the jobless getting close to some four million."

Germany's export-driven gross domestic product declined by five per cent last year, but is expected to return to a growth of 1.4 per cent in 2010.

Earlier this month, the market research group GfK disclosed that confidence among German consumers declined in January as labor market problems began to affect the wider population.