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Europe
Spain unemployment hits new high
At about 25 per cent, it is highest jobless rate in industrialised world, with young people particularly affected.
Last Modified: 27 Jul 2012 11:20
Hundreds of thousands of Spaniards have marched over recent weeks protesting against austerity measures [Reuters]

Spanish unemployment rate has hit record levels, with nearly one quarter of the labour force unable to find work and young people fearing the worst.

The unemployment rate rose in the second quarter to 24.63 per cent and a huge 53 per cent among the young, despite the start of the tourist season, official figures showed on Friday.

The increase in the overall jobless numbers was smaller than in the first quarter, with the number of eligible people out of work rising to nearly 5.7 million people.

Between April and June, 53,500 people lost their jobs, compared with 365,900 in the first quarter, the national statistics office said.

The unemployment rate rose from 24.4 per cent recorded in the first quarter - already the highest in the industrial world - as Spain entered its third straight quarter of economic contraction.

Among those aged 16 to 24, the rate rose to a huge 53.27 per cent from 52.01 per cent the previous quarter, reflecting the ongoing impact of Spain's double-dip recession following the collapse of a construction boom in 2008.

The number of households in which all eligible members are unemployed rose by 9,300, reaching more than 1.73 million overall.

The country is in its second recession in four years, hit hard by the bursting of the property bubble that threw millions out of work and badly affected the country's banks.

Austerity cuts

On Monday the Bank of Spain will publish its provisional estimate of economic output in the second quarter, expected to show a contraction of 0.4 per cent, compared with a 0.3 per cent decrease in the first three months.

Under pressure from European authorities, Spain's conservative government has approved tens of billions of euros' worth of spending cuts, tax hikes and other measures.

The latest set of measures announced by Prime Minister Mariano Rajoy on July 11 aimed to save $80bn over three years.

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Rajoy says the steps will help cut the public deficit in line with targets agreed with the European Union and strengthen the economy in the long term.

Critics say the measures will make the poor suffer unfairly from moves such as a public sector bonus cut and a rise in sales tax that together will hit consumption.

Hundreds of thousands of Spaniards have marched over recent weeks in protest at the measures.

The Spanish region hardest hit by rising unemployment was Catalonia in the northeast with a rate of 33.92 per cent, Friday's figures showed. The lowest rate was 14.56 per cent in the affluent Basque Country.

Spain's regions became a focus of financial concerns this week when Catalonia and others indicated they would need to borrow from a central government rescue fund in order to keep paying their debts.

The Spanish government's latest unemployment forecast is for a rate of 24.6 per cent at the end of 2012. This is a separate estimate from that of the statistics office, an autonomous state body.

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