Spanish tourist season brings jobless down

Posted on July 28, 2016

An employee mixes drinks at the Ona beach restaurant in Barcelona, Spain, on Tuesday, June 5, 2012. The Bank of Spain said May 29 that the country will slide deeper into its second recession since 2009 as Prime Minister Mariano Rajoy strives to cut the budget deficit by 40 percent in one year. Photographer: Stefano Buonamici/Bloomberg©Bloomberg

Spanish unemployment has fallen to 20 per cent, its lowest level in almost six years, buoyed by hiring in preparation for the summer tourism season, although job growth is slower than in recent years.

Data released on Thursday showed a rise of 271,400 people with jobs in the second quarter taking the number of employed workers in Spain to 18.3m — still almost 2.5m below the heights reached in 2007 before the country entered its long economic crisis. Almost two-thirds of the new jobs were temporary contracts.

    The second quarter is traditionally the best for employment in Spain, as companies hire workers for the main tourist season, and the services sector accounted for 227,300 of the new hires. When adjusted for seasonal variations, the 1.51 per cent growth over the first quarter falls to 0.29 per cent.

    The job growth and the fall in unemployment to the psychological barrier of 20 per cent are good news for the caretaker government of Prime Minister Mariano Rajoy, which has highlighted the Spanish economy’s improving health as Mr Rajoy tries to negotiate a coalition that will allow him to continue as prime minister following a second round of inconclusive national elections held in June.

    On Sunday, Spain’s economy minister, Luis de Guindos said the economy would grow 2.9 per cent this year, up from the 2.7 per cent previously forecast. On Wednesday, when the European Commission decided not to fine Madrid for missing its deficit target, deputy prime minister Soraya Sáenz de Santamaría hailed the move as a recognition of the government’s reforms.

    While Spanish employment continues to climb, the statistics suggest growth is beginning to slow. Spain added more than 400,000 jobs during second-quarter blips in 2014 and 2015, well above the 2016 rise. And in year-over-year terms, the 2.43 per cent growth in employment in the second quarter was the lowest since the third quarter of 2014.

    Marcel Jansen, a professor of economy at Madrid’s Autónoma University, said: “In general, I’d say the figure is a clear reflection of positive momentum in the Spanish economy. Quarter after quarter we’re adding employment. But when we look forward, there are reasons to expect it won’t be easy to maintain this rhythm without further reforms.”

    Prof Jansen points to slowing economic growth expectations for Spain over the next several years, as well as the country’s stubbornly high long-term unemployment. More than 2m Spaniards have been out of work for more than two years.

    “There’s an urgent need for Spain to have a government in place to take the reforms needed to get Spanish unemployment to European levels in the next couple of years,” he said. “Breaking the barrier of 20% is good. But it’s still 20 per cent.”

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