Central bank posts grim 2013 forecast

Spain's central bank said on Tuesday the country's economy would shrink even more in 2013 than last year and that unemployment would continue to rise.

Central bank posts grim 2013 forecast
The head of Spain's central bank Luis María Linde takes his oath of office before King Juan Carlos and Queen Sofia in 2011. Photo: Angel Diaz/AFP

The Spanish central bank forecast on Tuesday that the eurozone's fourth biggest economy will contract even more this year than in 2012, but would then benefit from "a modest rebound in 2014".

The Bank of Spain estimated that business activity would shrink by 1.5 percent in 2013, on the heels of a 1.37 percent contraction last year, and then expand by 0.6 percent in 2014.

It also forecast that Spanish unemployment, among the eurozone's highest, would rise to 27.1 percent of the workforce by the end of this year, but would finish 2014 at 26.8 percent.

The bank said unemployment "would moderate substantially" next year and that there would be a net increase in jobs in the latter part of the year.

According to El Pais, the latest figures are a lot less positive than those provided by public institutions and are closer to those of private analysts.

The boss of Spain's central bank Luis María Linde also said the lender's jobs forecast was based on the fact that "laws passed last year would bring down salaries".

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Unemployment in Spain hits four million for first time since 2016

The number of people in Spain registered as unemployed surpassed four million for the first time in five years in February, government figures showed Tuesday, as pandemic restrictions hit the country's tourism-dependent economy.

Unemployment in Spain hits four million for first time since 2016
Photo: Josep Lago/AFP

Jobless claims rose by nearly 45,000 last month over last month to hit 4,008,789, the labour ministry said, the fifth consecutive monthly increase.

The rise is due to the impact of “severe restrictions imposed to combat the third wave of the pandemic,” the ministry said in a statement.

The last time the number of jobless in Spain rose above four million was in April 2016.

Spain’s regional governments, which are responsible for health, have imposed various measures to try to curb the spread of the coronavirus, including shutting down bars and restaurants and nightly curfews which have hit the hospitality sector hard.

A broader, quarterly household survey by the national statistics institute INE provides the official unemployment rate, which hit 3.7 million or 16.1 percent at the end of December.

Both the labour ministry and the INE figures do not include the roughly 755,000 people benefitting from a government coronavirus furlough scheme as of the end of last year.

The Spanish government says it has spent €40 billion ($48 billion) since the start of the pandemic to finance the furlough scheme and help the self-employed.

Spain’s economy contracted by 11 percent in 2020, one of the worst performers in the eurozone, with its key tourism sector battered by the