Friday, April 24, 2009

Spain's jobless rate soars to 17%

Spain's unemployment rate hit 17.4% at the end of March, figures have shown, with the jobless total now having doubled over the past 12 months.

In the past year, two million people have lost their jobs taking the total out of work to just over four million.

The Bank of Spain recently predicted the jobless rate would reach 19.4% in 2010, as the recession took hold.

"It is a terrible figure," Octavio Granado, secretary of state for social security told state television.

He said the first quarter of any year was traditionally bad for employment in Spain.

Mr Granado also said that 2009 was expected to be the worst part of the economic downturn.

"So we are in the epicentre of the crisis. We are in the eye of the perfect storm," he said.

The National Statistics Institute said Spain's jobless rate at the end of the first quarter was up 3.45 percentage points from the end of 2008.

The BBC's Steve Kingstone in Madrid says the country has become used to grim unemployment data, but Friday's figures are especially shocking.

Prime Minister Jose Luis Rodriguez Zapatero will hope that the government's 70bn-euro ($92bn; £63bn) stimulus package will now create new jobs - above all in public works projects due to begin this month, our correspondent says.

But critics say deeper reforms of the labour market are needed - to eliminate red tape, and reduce the costs of hiring and firing permanent staff, he adds.

Under the current rules, many employers prefer to offer temporary contracts to staff who are then let go at the first sign of trouble.

Story from BBC NEWS:

Published: 2009/04/24 10:41:36 GMT

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