The jobless rate is now only marginally below the 10-year high of 12.1 per cent that it hit in February.
Young people were the most affected, with nearly one-in-three, or 32.5 per cent, between the ages of 15 and 24 out of work, compared to 25 per cent a year ago.
"We need to look beyond today's numbers towards 2011, as this will be the real crunch year that will decide Greece's fate"
Conduit Capital Markets
"The labour force figures for May, which showed a sharp increase in unemployment, illustrate that the second half of the year will continue to be very difficult for the Greek economy and for households in particular," Diego Iscaro, an economist at IHS Global Insight, said.
According to the latest research by retail confederation ESEE, about a fifth of small shops in central Athens have shut down as a result of the downturn.
"Unemployment will rise more in the months ahead. We have not gone through such a situation in the past: out of some 100 shops in my area 15 have closed in the last four months and I see things worsening from September," Konstantinos Kserikos, a book store owner in the centre of Athens, said.
Major companies like Aldi, the world's biggest discount food retailer, and French high-street retailer FNAC are leaving the Greek market, while Atlantic, a Greek supermarket chain, has filed for bankruptcy protection, citing the recession.
Greece's debt crisis started late last year, after the new Socialist government sharply revised its budget deficit.
The gap currently stands at 13.6 per cent of GDP, and the government has pledged to slash it to 8.1 per cent this year.
Weighed down by its deficit and high public debt, Greece narrowly avoided bankruptcy in May after its cost of borrowing on the international market rocketed.
The country secured a three-year $144.5bn package of vital loans from other European Union countries using the euro currency and the International Monetary Fund.
In return for the loans, the government has implemented painful austerity measures, including cutting salaries and pensions and hiking consumer taxes.
Greece's finances remain under intense scrutiny by the EU and IMF in order for it to continue receiving the loans, the next installment of which is due to be disbursed in September.
"We need to look beyond today's numbers towards 2011, as this will be the real crunch year that will decide Greece's fate," Anke Richter, the credit research director at Conduit Capital Markets, said.
"Greece is so far on a good track to reduce its budget deficit, but this is a marathon race. After five kilometres everyone looks in good shape. The question is, will the voters and politicians have the stamina in a year's time?"