Spain unemployment hits 12-year high: ministry

3rd February 2009, Comments 0 comments

Latest statistics from the labour ministry show there are 3,327,000 who are unemployed in the country.

MADRID – The number of people out of work in Spain rose 6.35 percent to 3,327,000 in January compared with the previous month, the highest level for 12 years, the labour ministry announced on Tuesday.

By the end of January there were 3,327,801 unemployed workers in Spain, up 198,838, the highest number since 1996, when the current method of calculation was introduced.

It was the tenth straight monthly increase. The jobless total rose by 1.065 million between January 2008 and last month, an increase of 47.12 percent.

"The contraction of economic activity and the rise in unemployment in January confirm the intense process of adjustment which the Spanish economy is undergoing," said the secretary general for employment, Maravillas Rojo.

Spain's once-buoyant economy, the fifth-largest in Europe, has suffered as the global financial crisis has added to the woes of the key real estate sector, which was already weakened by oversupply and rising interest rates.

Last month the government slashed its forecast for the economy to a contraction of 1.6 percent this year from the growth of 1.0 percent previously forecast. The central bank says Spain entered a recession at the end of 2008.

"This year is going to be difficult for everyone," Prime Minister Jose Luis Rodriguez Zapatero said last week during an appearance on a live TV show.

Spain's unemployment rate has risen steadily since it dipped to 7.95 percent in the second quarter of 2007, its lowest level since 1978, to 13.91 percent during the last quarter of last year, the highest rate in the 27-nation European Union.

The European Commission, the executive arm of the EU, is more pessimistic. It sees the unemployment rate continuing to rise in Spain to 16.1 percent in 2010 and 18.7 percent the following year.

The labour ministry does not release the unemployment rate, which is measured on a quarterly basis by the National Statistics Institute.

In December, the International Monetary Fund warned the Spanish economy, risks entering an extended period of stagnation unless sweeping structural reforms are carried out.

Dismissal costs must be lower to boost hiring, collective bargaining agreements need to be more flexible and the practice of indexing wages to inflation must end, the Washington-based Fund said.

[AFP / Expatica]

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