Spanish Jobless Rate Hits Record After Rajoy’s First Year
Baku, January 24 (AZERTAC). Spanish unemployment rose to a record in the final quarter of 2012 as Prime Minister Mariano Rajoy’s government imposed the deepest budget cuts in the country’s democratic history.
The number of jobless approached 6 million people, or 26.02 percent, from 25.01 percent in the previous three months, the National Statistics Institute in Madrid said today. That matched the median forecast of 10 economists surveyed by Bloomberg. Spain is now home to a third of the euro region’s unemployed.
The International Monetary Fund yesterday cut its forecast for economic growth in Spain this year, forecasting that gross domestic product will contract 1.5 percent after previously predicting a drop of 1.4 percent.
The Bank of Spain said separately that the recession worsened in the fourth quarter due to budget cuts. The central government and the regions started implementing Rajoy’s fifth package of austerity measures in a year, including higher sales tax and cuts in unemployment benefits, public-sector jobs and wages.
Meeting the European Union deficit target for 2013 will require “a very ambitious additional fiscal effort,” the Bank of Spain said. The European Commission said this week that Spain will probably miss its 2012 goal of 6.3 percent of GDP, and in 2013 it sees the shortfall at 6 percent.
Rajoy has requested the Spanish regions divide their combined deficit by five in the two years through the end of 2013, even as education and healthcare represent over half of their spending and the recession undermines tax receipts.
While Economy Minister Luis de Guindos this week ruled out additional budget cuts, the government is working on an overhaul of public administrations that could further fuel unemployment this year. Expansion newspaper said yesterday a draft law pares more than 60 percent of local government jobs across Spain.
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