Spain's jobless rate surged to a record 24.4 percent at the end of March as 5.6 million people searched for work in a recession-bound, deficit-plagued economy, data showed Friday.
Hours after Standard and Poor's downgraded Spain's sovereign debt citing the deficit, fragile banks and recession, the country disclosed that its unemployment woes had deteriorated drastically.
Already, Spain had the highest unemployment ratio in the industrialized world, as the slumping economy failed to absorb the millions of workers cast out of jobs when a property bubble imploded in 2008.
The unemployment rate soared to 24.44 percent of the potential workforce at the end of March from 22.85 percent three months earlier, the National Statistics institute report showed.
Some 374,000 jobs were destroyed in the first quarter of the year, pushing the unemployment rate to its highest level since records began in their existing format in 1996, it said.
The Bank of Spain had warned this week of a worsening employment market when it concluded that the country had plunged back into recession at the end of last year.
Gross domestic product fell an estimated 0.4-percent in the first quarter of 2012 after a 0.3-percent decline in the last three months of 2011, the central bank said.
Standard & Poor's cut Spain's sovereign debt rating Thursday by two notches, warning that the government's budget situation is worsening and that is likely to have to prop up its banks.
Standard & Poor's cut Spain's sovereign credit rating to BBB-plus and added a negative outlook on Thursday, saying it expected a recession this year and next, making it harder to meet deficit-cutting targets.
At the same time, the government was increasingly likely to have to pump in funds to help banks, many of which are still burdened by non-performing loans extended during the property bubble.
|Copyright © 2012 Naharnet.com. All Rights Reserved.||http://www.naharnet.com/stories/en/38302|