Spain improves outlook for joblessness and debt

The Spanish government on Friday lowered its 2015 forecasts for unemployment and public debt, bolstering its claims of a surging economic recovery months ahead of a general election.

Spain improves outlook for joblessness and debt
Young men pose pose during their work day in Andalusian town of Villamartin. Photo: Cristina Quicler / AFP

The economy ministry said the Spanish economy would create more than 600,000 jobs this year and start to chip away from next year at its debt mountain.

It said the overall jobless rate in 2015 would be 21.1 percent – one percentage point lower than its previous forecast, but still painfully high for ordinary Spaniards.

It confirmed its new growth forecast for this year, which it has revised sharply upwards from 2.9 to 3.3 percent.

That is more than twice the 1.5 percent average rate forecast by Brussels for the eurozone – a striking recovery after on-and-off recession in Spain between 2008 to 2013 that left millions of people out of work.

“For the first time since the start of the crisis in 2008, the Spanish economy is starting to see the light at the end of the tunnel,” Economy Minister Luis de Guindos told a news conference.

The conservative government imposed tough spending cuts and tax rises from 2012 that it said were necessary to stabilise public finances.

The governing Popular Party is now touting the recovery ahead of an election due from November, in which it faces a tough challenge from new anti-austerity parties.

Budget Minister Cristobal Montoro on Friday lowered the official forecast for Spain's public debt to 98.9 percent of gross domestic product from a previous outlook of 100.3 percent.

He said 2016 was likely to be “the first year in which we start, albeit modestly, to lower the burden of debt on GDP,” which he said will decline to 98.5 percent.

The average debt level across the countries of the eurozone was 92.1 percent at the end of 2014, according to official data.

The Spanish government's forecast for the public deficit – a key indicator of financial stability that measures how much spending exceeds income – stands at 4.2 percent of GDP for this year.

The government forecasts it will fall below the three percent level set by European treaties in 2016.

The last official unemployment rate, for the first quarter of this year, was 23.78 percent. But the government forecast on Friday that this would dip just below the symbolic 20 percent level in 2016.

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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