Spanish jobless rises again in February

, Comments 0 comments

The number of Spaniards out of work rose for a second consecutive month in February, official data showed Wednesday, adding to government problems in cutting spending and restoring the public finances.

There were nearly 4.3 million people registered as unemployed last month in Spain, which has the highest jobless rate in the industrialised world, a rise of 68,260 people or 1.6 percent from January, the labour ministry said.

Compared with 12 months ago, the figure was up 4.0 percent or 168,638.

The rise in the number of those unemployed and claiming benefit adds to the squeeze on public sector finances just as the government is trying to stamp out fears that Spain will need an Irish-style EU-backed bailout.

Figures Tuesday showed Spain had a 2010 public deficit of 9.24 percent of economic output, just below its target of 9.3 percent as spending cuts by the central government offset the missed targets of about half of the country's 17 regional administrations.

Spain has vowed to drive its public deficit down below the European Union limit of 3.0 percent of Gross Domestic Product by 2013.

"The latest unemployment data were very disappointing, providing further evidence that negative sentiment in the household economy is going to linger during 2011," said Raj Badiani, an economist at IHS Global Insight in London.

"Firms continue to exercise a very cautious approach to hiring as a result of the weak domestic demand conditions and tight profit margins," he added.

The government does not provide a jobless rate but the national statistics institute, which uses a different calculation method from the labour ministry, said in January that it stood at 20.33 percent at the end of 2010.

That is the highest level in the Organisation for Economic Cooperation and Development and topped the government target of 19.4 percent for the year.

Spain's booming construction industry drew millions of unskilled immigrant workers and generated high levels of economic growth in the decade to 2008.

But the collapse of the property bubble, compounded by the global financial crisis, left many people out of work, especially immigrants and youths.

Secretary of state for employment, Mari Luz Rodriguez, called Wednesday's unemployment figure "a bad number" but she stressed that the rise in joblessness was smaller then those posted in February of 2010 and 2009.

In October, the government raised its forecast for the jobless rate for 2011 to 19.3 percent from a previous estimate of 18.9 percent due to the effects of spending cuts aimed at reining in the public deficit.

It predicts the jobless rate will dip to 17.5 percent in 2012 and 16.2 percent in 2013.

The Spanish economy, the European Union's fifth biggest, shrank 0.1 percent in 2010, after contracting 3.7 percent in 2009, making it one of only three eurozone countries along with Greece and Ireland to have shrunk last year.

The government predicts it will expand by 1.3 percent this year but the International Monetary Fund sees growth of just 0.6 percent.

Last year, the government introduced a hotly contested labour market reforms which cut the country's high cost of firing workers and gave companies more flexibility to reduce working hours and staff levels in economic downturns -- changes that it argued would boost job creation.

© 2011 AFP

0 Comments To This Article