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Job losses drive Spain's unemployment to record high

Text by News Wires

Latest update : 2012-04-03

The number of registered job seekers in Spain hit a new high in March, the government said Tuesday, as ongoing lay-offs saw another 40,000 people lose their jobs. The country’s unemployed rate rose to almost 23 per cent.

REUTERS - Spain’s number of registered jobless rose for the eighth straight month in March as companies in all areas of the economy continued to lay off staff in an effort to survive a deepening crisis.

The number of registered unemployed rose by 0.8 percent in March from a month earlier, or by 38,769 people, leaving 4.75 million people out of work, data from the Labour Ministry showed.

Spain’s official unemployment rate, the result of a wider survey which includes registered and unregistered unemployed, rose to 22.9 percent in the fourth quarter of 2011, the highest in the European Union.

Almost a third of all those unemployed in the 17-member euro zone live in Spain, while half of Spaniards under 25 are out of work, according to data from EU statistics body Eurostat.

Deep spending cuts to meet Europe-set deficit targets, announced on Friday, are likely to increase pressure on Spain’s growth outlook, while a reform to make the labour market more flexible may also prompt more lay offs in the short term.

“Unemployment will continue to go up, simply because you need growth of around 1.4 or 1.5 percent to create jobs and we don’t think this is achievable until 2014,” economist at Citi Guillaume Menuet said.

“When you see aggressive labour market reforms it often results in more short-term unemployment.”

The Spanish government expects the economy to shrink by 1.7 percent this year, though Citi believes this is more likely to be closer to -2.7 percent. Citi forecasts a contraction of 1.2 percent in 2013.

The number of registered jobless in the dominant service sector rose by 15,062 (0.54 percent of those employed in the sector), in industry by 4,988 (0.93 percent), agriculture 4,882 (2.99 percent) and construction 2,444 (0.3 percent).

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Date created : 2012-04-03

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