HispanicBusiness

Spain's unemployment rate has climbed to 26.02 per cent among the general workforce and to 55.1 per cent among people younger than 25 years, statistics body INE said Thursday.

The number of jobless increased by 187,300 people in the fourth quarter to a total of 5.97 million, according to INE. Over the entire year, about 690,000 people joined the ranks of the unemployed.

An average of about 1,900 people lost their jobs daily in 2012, raising unemployment to the highest level since the current method of calculating it is in use. Jobs were lost especially in the services, construction and industrial sectors.

Agriculture Minister Miguel Arias Canete admitted that the figures were "not good," but said the government's labour market reform and structural reforms would begin to stem the rise of unemployment this year.

The unemployment figures followed an announcement on Wednesday by the Bank of Spain that the pace of the recession had accelerated in the final quarter. During all of 2012, the economy contracted by 1.3 per cent, less than the government estimate of 1.5 per cent.

The International Monetary Fund has issued a gloomy assessment on Spain, predicting that the economy will shrink by 1.5 per cent this year, three times the government estimate.

Critics attribute the recession partly to the austerity policies of Prime Minister Mariano Rajoy's government, which has tried to trim the budget deficit from 9.4 per cent in 2011 to 6.3 per cent in 2012. However, the government only managed to cut the deficit to an estimated 7 per cent.