* Employment to reach highest level since '90 next year
* German job rise to stimulate economy - EconMin
(Adds econ and labour minister quotes)
By Sarah Marsh
BERLIN, Sept 16 (Reuters) - German joblessness will likely fall below the key 3 million mark this year and employment will reach its highest level since reunification in 1990, fuelling the recovery, German officials said on Thursday.
Germany's Labour Minister Ursula von der Leyen told the Bundestag lower house of parliament that if the current positive trend in unemployment continued, "we could drop below the 3 million level towards the end of the year".
A stronger labour market could boost domestic consumption and imports in Europe's largest economy.
"The German job miracle, as it is called abroad, is sparking hundreds of thousands of personal economic stimulus programmes," Economy Minister Rainer Bruederle told parliament.
Germany emerged from its deepest post-war recession in the second quarter of last year and is staging a strong export-fuelled recovery, helping unemployment fall in August to its lowest level since November 2008. [ID:nLDE67U0LJ]
The Federal Labour Office's research institute IAB said on Thursday unemployment would fall to 2.958 million on average in 2011. Joblessness last dropped below the key psychological level of 3 million on an annual average basis in 1992.
The labour market will pick up its upwards path that was interrupted in 2008 by the financial crisis, the IAB said, basing its forecast on the assumption that the German economy would grow 3 percent this year and 1.75 percent next year.
Furthermore some 40.63 million people will likely be in gainful employment in Germany in 2011, the highest level since reunification in 1990.
Von der Leyen justified cuts in her ministry's budget during a parliamentary debate on the 2011 budget, pointing to lower costs resulting from falling unemployment.
Even during the crisis, Germany shed fewer jobs than others, thanks partly to reforms promoting labour force flexibility as well as state spending encouraging firms to put staff on "Kurzarbeit" -- shorter hours -- instead of firing them.
"We even need to take care that we don't run into a big problem of (lack of) skilled workers soon," said Bruederle. "And that is why we also need skilled foreign workers in Germany."
Some hope that this problem will be offset from 2011 when Germany lifts job market restrictions on workers from the mostly ex-communist states that joined the European Union in 2004.
Cabinet ministers have also suggested lowering the income threshold and streamlining the visa procedure for skilled workers seeking entry to Germany.
"We need to switch from uncontrolled immigration into the social systems to steering immigration towards upholding our social systems," Bruederle said. (Additional reporting by Holger Hansen; Editing by Toby Chopra)