Portuguese unemployment hits record 17.7%

Portugal’s unemployment rate rose sharply in the first quarter of 2013 to a record high 17.7 percent from 16.9 percent in the fourth quarter of last year, data from the national statistics institute INE showed on Thursday.

For the whole of 2013 the government has forecast a rate of 18.2 percent and 18.5 percent for next year as the effects of recession and austerity measures take hold.

The record high comes as a new government spending package, announced by the centre-right government last week, foresees the slashing of 30,000 public sector jobs out of a total 700,000.

Civil servants are also to work 40 hours per week, compared with 35 at present and are to be eligible for full retirement at the age of 66, one year later than now.

The new terms are aimed at ensuring continued aid payments from a package worth 78 billion euros ($102 billion) granted by the European Union and International Monetary Fund in May 2011.

According to the INE data, 4.4 million people currently hold jobs in Portugal out of a total population of about 10.5 million.

In 2012, the economy contracted by 3.2 percent and is forecast to shrink another 2.3 percent in 2013.