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Unemployment doubles year-on-year, soaring in tourism-dependent Algarve region

43unemployment soarsUnemployment in Portugal’s tourism-dependent Algarve region more than doubled in April compared with the same month last year, data showed on Wednesday, as the lockdown kept foreign visitors away and wiped out seasonal jobs.

In the southern Algarve, usually packed with tourists but now nearly deserted, just over 4,700 people registered as unemployed in April, bringing the total out of work to 26,379 – nearly 15,000 or 123% more than this time last year, data from the Institute for Employment and Vocational Training showed.

In Portugal as whole, just over 48,500 registered as unemployed in April, a 22% year-on-year jump, bringing the total of those without jobs in Portugal to around 392,000 people.

Around 71% of the newly unemployed worked in the services sector including restaurants and retail stores, which were shut after Portugal declared a state of emergency on March 18 but are now slowly reopening as part of a sector-by-sector lockdown exit plan put in place from May 4.

Earlier this month, Finance Minister Mario Centeno said the unemployment rate could hit around 10% by the end of the year, compared with 6.7% reported during the first quarter of 2020. The unemployment rate had been falling as the country slowly recovered from the debt crisis.

The coronavirus outbreak, so far numbering 29,432 confirmed cases and 1,247 deaths, is set to hammer Portugal’s economy: the International Monetary Fund expects gross domestic product to contract by 8% this year, while the European Commission predicts a 6.8% drop.

More than 1 million workers in Portugal have been laid off since the pandemic. The layoff scheme allows firms to temporarily suspend jobs or reduce working hours instead of firing workers.

Madalena Feu, IEFP regional delegate, explained in March, that these numbers are due “to the closing of borders caused by the pandemic and to the containment measures to prevent the spread of the virus, there were natural breaks in activity in a sector that is predominant” in the region. “The Algarve lives 90% of the tourism sector and, therefore, it is a region that suffers more than the others”, she added.