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Spain jobless figures show glimmer of hope

Unemployment drops by 0.9 percentage points as recession-crippled country shows signs of economic recovery.

Last Modified: 25 Jul 2013 15:01
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Bankia swung back into profits in the first half after running up a loss of $25bn for the full year of 2012 [EPA]

Spain's jobless rate has finally dropped after reaching a record low in the first quarter of this year, new figures show.

Spain's National Statistics Institute said on Thursday that the number of people out of work dropped by 225,200, or 0.9 percentage points, from April to June to 5.87 million, or 26.26 percent in the second quarter.

The second quarter figures were a welcome boost after the economy, mired in recession for most of the past four years, reached a record 27.16 percent in the first quarter.

The total jobless number reached 5,977,500 for the quarter, dipping under the psychological barrier of six million.

"If we compare the development of unemployment of this quarter to the same quarter during the last five years, it must be underlined that the fall in unemployment is the biggest since 2008," the national statistics office said.

Recession

The Spanish economy contracted by 1.37 percent last year, the second worst annual slump since 1970, and Madrid forecasts it will shrink again by 1.0 percent to 1.5 percent this year.

However, in the past month, the government has repeatedly signaled that the economy is about to get back on track on a wave of resurging exports.

Last week, it reported that trade deficit had narrowed sharply in May because of booming exports. Most in demand were energy and textiles.

Hopes rose that Spain might be able to trade its way out of the recession, with the Bank of Spain saying on Wednesday that recovery was close because of exports.

Also on Thursday, the lender that has become the symbol of Spain's ailing banking sector, Bankia, reported that it has swung back into profits in the first half after running up a loss of 19bn euros ($25bn) for the full year of 2012.

Bankia was nationalised by the Spanish government in May 2012. Its fate prompted a broader rescue for the banking sector.

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