Spain: Unemployment hits 14-year high
April 29, 2011
In the first quarter, the unemployment rate rose to 21.3% (4.9 million people), which was broadly in line with the government's expectation of less than 5.0 million unemployed. The reading was up from 20.3% recorded in the fourth quarter of 2010 and represents the highest level since the first quarter of 1997. In the first quarter of 2011, the economy lost 213,500 jobs, as higher taxes and cuts to government spending dented job creation efforts. Job losses in both the services and industrial sectors drove the level of unemployment higher. Against this backdrop, the government is cracking down on the underground labour market, offering incentives to employers who declare unregistered employees, and at the same time strengthening sanctions against those working illegally while receiving unemployment benefits. In the latest government projections from April, the cabinet raised its annual average unemployment forecast from 19.3% to 19.8% this year and from 17.5% to 18.5% for 2012.