Data released on April 25 revealed Spanish unemployment to have reached 27.2 percent, the highest such figure at least since the nation’s transition to democracy in 1976 – when records began. The report has fuelled European debate in questioning the proven effectiveness of austerity, with many wishing to switch conversely to reviving economic growth.
The figures reveal for over six million Spaniards to have endured unemployment through the first three months of 2013 – with 57 percent of under-25s out of education unable to find work. The likes of which represent joblessness having grown seven quarters in a row, in effect leaving more Spaniards out of work than the entire population of Denmark and matching the respective rates of Greece – presently in the midst of a full-blown depression.
Regardless of the grim economic outlook, Spanish Prime Minister Mariano Rajoy remained positive in parliament on Tuesday: “Next year we will have growth and jobs created in our country.”
However, the report indicates for joblessness to have fallen below IMF’s predictions, the organisation having last week cut the country’s annual growth forecast to a 1.6 percent contraction from the original 1.5 percent, and having estimated for unemployment to peak at 27 percent in 2013.
Jose Luis Martinez, an analyst at Citi, said of the results: “These figures are worse than expected and highlight the serious situation of the Spanish economy as well as the shocking decoupling between the real and the financial economy.”
The country’s darkening economic prospects are a noted contrast with current financial markets. With a global tendency towards liquidity, Spain’s borrowing costs have experienced a marked drop, all but banishing fears of the budget crisis forcing Madrid to seek international sovereign bailout.
Spain has teetered in and out of recession throughout the past five years, the economy having shrunk 1.9 percent over the past year with a return to growth likely to come as late as 2014. Analysts attest that jobs look unlikely to be created before growth rises above one percent, a feat unlikely to eventuate until mid 2014, by which time approximately two million Spaniards are expected to have endured unemployment for over three years.
Marcel Jansen of Fedea stated: “More than half Spain’s unemployed have very low levels of education and skill levels and that, combined with several years of unemployment, is the biggest risk to recovery in Spain.”
The nation is said to have demonstrated the worst budget deficit in the EU through 2012, in part due to a €41bn bailout payment meant for rescuing banks. The EU deficit target presently stands at 4.5 percent of GDP, though it looks increasingly likely for the figure to be lessened due to a worsening Europe-wide recession.