The unemployment rate in Spain climbed to a new record high in the second quarter of 2012 as recession and stringent austerity measures forced firms to shed more jobs.
The latest figures from the statistical office INE showed that the unemployment rate rose to 24.63 percent in the second quarter from 24.44 percent in the first quarter. This was almost in line with economists' forecast of 24.65 percent and was 3.74 percentage points higher than last year.
The number of unemployed persons rose by 53,500 over the quarter to 5.69 million. Unemployment has now risen for four consecutive quarters. The number of persons out of work was 859,400 more than the same period last year.
Spain has the highest unemployment rate in the European Union.
Employment, meanwhile, declined 0.09 percent, or by 15,900 quarter-on-quarter during the period to 17.4 million. This was 4.84 percent less than last year.
Employment declined by 21,000 in the industrial sector, while agricultural sector recorded a loss of 44,000 workers. However, there was some improvement in the employment conditions in services and construction.
The Bank of Spain estimates the economy to have contracted 0.4 percent sequentially in the second quarter, dragging it deeper into recession. The Spanish government cut its economic forecast early this month and now expects the economy to shrink 0.5 percent in 2013.
The International Monetary Fund has slashed Spain's economic outlook for next year and now sees a 0.6 percent contraction in 2013 after 1.5 percent decline in GDP this year. The IMF is due to release a report on the Article IV consultation with Spain today at 11.30 am ET.
The economy is in the midst of an unprecedented double-dip recession with unemployment already unacceptably high and public debt increasing rapidly, IMF said in June. According to the Fund, a successful implementation of the recent labor reform is crucial for the economy.
In contrast to the statistical office's result, the labor ministry data published on July 3 showed a third consecutive decline in unemployment in June. The number of unemployed fell by 98,853 from the month earlier to 4.62 million. Also, the decline was the steepest on record for the month of June.
by RTT Staff Writer
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