Spain unemployment rate ends up stuck at 26 per cent in 4th quarter of 2013

MADRID – Spain’s sky-high unemployment rate remained stuck at 26 per cent in the fourth quarter as the economy expanded but not enough to trigger job growth, according to a pair of government reports issued Thursday.

The jobless rate for the October-December period rose to 26.03 per cent from 25.98 per cent in the previous quarter and the number of unemployed stood at a rounded 5.9 million people, the National Statistics Agency said.

Separately, the Bank of Spain issued preliminary figures showing the country’s economy grew 0.3 per cent in the fourth quarter after registering a 0.1 per cent rise in the previous quarter following nine quarters of declines. For the whole of 2013, economic activity shrank 1.2 per cent.

The statistics agency is expected to confirm the bank’s GDP figures in a preliminary report on Jan. 30 while the final report will be issued on Feb. 27.

The unemployment report said jobs were lost in Spain’s services, construction and industry sectors but were added in agriculture.

Government officials say Spain’s sluggish economy is stabilized and on track for job creation that will reduce the unemployment rate. But economists predict it will take years to reduce joblessness to a more tolerable level.

Much of the current economic expansion, they say, is due to strong export growth by companies that have cut costs dramatically to make their operations more globally competitive.

Spain’s economy tanked and unemployment shot up when the country’s housing construction bubble burst after the global financial crisis of 2008.

Banks left saddled with bad loans and repossessed property were forced into mergers and closed by the government, which received 100 billion-euro ($135 billion) credit line in 2012 to shore up those that survived. The country tapped 40 billion euros, and exited the program on Thursday.