Spain's jobless rate drops for first time in three years

29th October 2010, Comments 0 comments

Spain's unemployment rate fell below 20 percent in the third quarter, its first decline since the second quarter of 2007 as the service sector created jobs, the national statistics institute said Friday.

The jobless rate dipped to 19.79 percent in the July-September period, down from 20.09 percent in the previous three months, a 13-year high and the highest level in the 16-nation eurozone, it said in a statement.

Last month, the government raised its forecast for the unemployment rate for next year to 19.3 percent from a previous estimate of 18.9 percent.

The high rate of unemployment adds to the government's social welfare bill as it has had to extend hundreds of thousands of dole payments at a time when it seeking to slash a yawning public deficit that has rattled investors.

The Spanish economy, Europe's fifth-largest, slumped into recession in 2008 due to a collapse of labour-intensive property boom that had fueled growth for over a decade.

It recovered painfully this year with tepid growth of just 0.1 percent in the first quarter and 0.2 percent in the second.

© 2010 AFP

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