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Europe

Spain's unemployment rate above 20 percent

Text by News Wires

Latest update : 2010-04-27

Spain's unemployment rate topped 20 percent in the first quarter of 2010, its highest level since 1997, a report said Tuesday. The report cited figures accidentally released ahead of schedule by statistics institute INE.

AFP - Spain's jobless rate topped 20 percent in the first quarter, its highest level since 1997, a report said Tuesday, citing figures accidentally released by statistics institute INE ahead of schedule.

The number of unemployed jumped by 286,200 during the first three months of the year compared with the final quarter of 2009 to reach 4.61 million or 20.05 percent of the workforce, conservative daily ABC reported.

The figure was posted on INE's web site on Monday for several minutes, it said. INE will publish the first official quarter unemployment figures on Friday.

Spain's unemployment rate stood at 18.83 percent in the fourth quarter of 2009 with 4.33 million people out of work, according to INE figures published on January 29.

In a statement, INE confirmed that a technological "incident" had made "certain data" from its quarterly unemployment study visible on its web site but it did not confirm the figures published by ABC.

The country is grappling with a collapse of its labor-intensive construction industry at the end of 2008.

It has the highest unemployment rate in the 16-nation euro zone and accounts for half the region’s job losses over the last two years, according to the European Union’s statistics office Eurostat.

The continued rise in the unemployment rate could make Spain's socialist government, which is struggling to rein in a ballooning public deficit which has rattled financial markets, spend more on benefits.

Earlier this month Bank of Spain governor Miguel Angel Fernandez Ordonez warned that "mass unemployment" was the greatest risk faced by the country's banks, which will suffer from less business and higher defaults as a result.

In January, Finance Minister Elena Salgado meanwhile raised the government's estimate for the 2010 unemployment rate to 19 percent from 18.9 percent.

The Spanish economy, Europe's fifth largest, shrank by 0.1 percent in the last three months of 2009, making it the last major economy still in recession.

The government has forecast a return to growth in the second half of 2010.

The Spanish economy has proved especially vulnerable to the global credit crunch because growth relied heavily on credit-fuelled domestic demand and a property boom boosted by easy access to loans that has collapsed.

French investment bank Natixis estimates that prior to the crisis 30 percent of Spain's working population worked directly or indirectly for the construction industry.

"This was pure madness," it said in a research note last month, adding there are 1.2 million unsold housing units currently on the market in Spain.
 

Date created : 2010-04-27

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