Spanish Unemployment Rate Hits Record High Of 26.02%
Spain's jobless rate increased to a record high in the fourth quarter, leaving nearly six million people unemployed as the government engaged in sharp spending cuts after the economy plunged deeper into recession, latest data showed on Thursday.
The unemployment rate increased to 26.02 percent in the fourth quarter from 25.01 percent in the preceding three months, statistical office INE said. The rate was almost in line with the consensus forecast for 26 percent.
The latest figure is the highest in the history of modern Spain, after the death of the dictator Francisco Franco in 1975. The current government led by Prime Minister Mariano Rajoy came to power late 2011.
The jobless rate among those under the age of 25 years also jumped to a record 55.13 percent in the fourth quarter from 52.34 percent in the previous three months. A year ago, the figure was 48.56 percent.
There were around 5.97 million unemployed persons in the country at the end of 2012, higher by 187,300 compared to the third quarter. From the fourth quarter of 2011, the number of jobless persons increased by 13.12 percent.
Meanwhile, the number of employed persons decreased 2.1 percent sequentially to 16.96 million in the three months ended December. Year-on-year, employment dropped by 4.78 percent.
The Spanish economy deteriorated severely in recent times after the country's once-booming real estate sector bust in 2008, leaving millions of workers out of labor.
Data from the government this week showed residential property prices fell 10 percent in the fourth quarter compared to last year. Separate data showed the home sales in Spain decreased at a marked annual rate of 6.1 percent in November.
In its latest quarterly bulletin, released yesterday, the Bank of Spain said Spain's recession likely deepened in the fourth quarter, with gross domestic product (GDP) falling for the fifth consecutive quarter.
According to the bank, GDP is estimated to have dropped at a faster rate of 0.6 percent sequentially in the fourth quarter than 0.3 percent in the third quarter, signaling a worsening of the ongoing recession.
Year-on-year, the economy contracted 1.7 percent during in the fourth quarter, after shrinking 1.6 percent in the third quarter. In the whole of 2012, GDP has declined 1.3 percent.
The Spanish economy may stop contracting in the second half of this year, but the balance of risks seems tilted towards a more protracted recession and a real return to growth may have to wait until next year, ING Bank economist Martin van Vliet said yesterday.
"The recent fall in Spanish government bond yields has been impressive," the economist noted. "But it has not yet been accompanied by meaningful signs of improvement in Spain's real economy."
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