Spain’s jobless rate hits 17%

MADRID – SPAIN’S unemployment rate has soared to 17.4 per cent, with nearly two million jobs lost over the past year, as the country that was once a model of growth for much of Europe now struggles with recession, government figures showed on Friday.

The jobless rate as of the end of March was up 3.45 percentage points from the end of 2008, the National Statistics Institute said.

In the first quarter of this year alone, 802,000 jobs vanished and the total number of unemployed now stands at a historic high of 4.0107 million.

That tops the 3.586 million jobless in Germany, which has Europe’s largest economy and a population almost twice the size of Spain’s.

‘It is a terrible figure,’ Octavio Granado, secretary of state for social security, told Spanish National Television. He said the first quarter of any year is traditionally bad for employment in Spain and 2009 is expected to be the worst stretch of the economic downturn.

‘So we are in the epicenter of the crisis. We are in the eye of the perfect storm,’ Mr Granado said.

Spain had been one of Europe’s great economic success stories, posting more than a decade of solid growth on the back of a red hot construction industry. But its economy has collapsed over the past year or two due to the bursting of a real estate bubble and tighter credit conditions brought on by the international financial crisis.

Spain has gone from being one of the European Union’s largest net creators of jobs to having its highest unemployment rate.

Finance Minister Elena Salgado called the new figures ‘bad, and worse than expected.’ She said the government will strive to guarantee benefits for the jobless, saying there is a ‘human reality’ behind the dry numbers that try to describe Spain’s economic woes.

Spain is in a technical recession after gross domestic production shrank in the last two quarters of 2008, and the government says it expects the economy to contract 1.6 per cent this year. The IMF paints an even grimmer picture, predicting a fall of 3.0 per cent in Spanish output this year. — AP

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