OECD Predicts Spain’s Unemployment Will Reach 27.8% in 2014
July 19th, 2013
According to the Organisation for Economic Cooperation and Development (OECD), the unemployment rate in Spain, which was 26.9% in May, will continue to rise and will stand at 27.8% in late 2014, when it will remain the second highest of the 34 countries in the OECD, lower only than the 28.2% of Greece.
In their April forecast, the International Monetary Fund (IMF) predicted a reduction in unemployment in 2014, from the 27% of this year to 26.5% next year. However, their revision of the July forecasts reduced Spain’s growth prospects from 0.7% to zero in 2014, which could have a significant effect on employment.
The European Commission estimated in May that the unemployment rate would be 27% this year and 26.4% in 2014. For comparison, the Spanish Government calculates unemployment rates of 27.1% and 26.7%, respectively.
According to the OECD, Spain and Greece will continue to more than triple the average level of unemployment in the countries of the Organisation, which according to a report will go from the current 8% to 7.8% at the end of next year. They are also the countries which have suffered the biggest increases in their unemployment rates since the crisis began in 2007, with more than 18 percentage points of a rise in both cases, and more than four million additional unemployed in Spain.
The OECD, which considered the 55% youth unemployment rate in Spain as “alarming”, estimated that the labour reform last year has brought Spain’s legislation in line with “labour legislation in most European countries”, and that its effects “should increase labour productivity and job creation when economic growth resumes”. The report noted: “If these reforms are fully implemented, they can promote a more inclusive labour market and better allocation of resources with improved productivity.”
El Mundo reported that in the chapter on Spain, the OECD expressed concern over rising long-term unemployment – up 19.1% from the fourth quarter of 2007 to 47% in late 2012 – and also stressed that the proportion of young people working has declined by 21 percentage points since the beginning of the crisis in Spain, which is five times more than the OECD average.
Furthermore, the report noted that the proportion of those who neither study nor work (the “ninis”) has risen seven points, which highlights a situation “particularly vulnerable” to the threat that a prolonged period of inactivity may adversely affect the whole of their working life.
The report also pointed out that the increase in youth unemployment has affected more men than women, and in particular those with less qualifications.
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