Spain’s Unemployment Rate Hits 7-year Low

Spain’s jobless crisis continued to show signs of abatement in the final quarter of 2016 as the unemployment rate fell to 18.6 percent, which is the lowest in over seven years.

According to the official data released by the National Statistics Institute on Thursday, the number of unemployed people witnessed a drop of 83,000 in the last quarter of 2016 to remain at 4.2 million at the end of last year. The Institute added that the unemployment rate had dropped by 2.3 percentage points over the aforesaid period.

However, the scenario is far from favorable for Prime Minister Mariano Rajoy’s government as the unemployment rate for people under the age of 25 is still as high 43 percent, marginally down from the 46 percent at the end of 2015. Furthermore, Spain’s unemployment rate is only better than Greece’s 23.1% in the 28-member European Union.

Analysts have warned that while the recovery process was still on track, the pace of employment was starting to slow down. According to Marcel Jansen, who is a professor of economics at the Autonomous University of Madrid, “If you look at the year-on-year growth rates, you see that Spain is still one of the best-performing labor markets in Europe. But the numbers also tell us that we can’t take for granted that Spain will continue to generate employment at the high rates we have seen in recent years”.

“During 2015 and in early 2016, employment grew by about 3 percent year on year. That rate was now closer to 2 percent”, added Jansen.

PM Rajoy’s conservative government has seen reducing unemployment and boosting economic growth as its main goals since assuming office in December 2011. During an interview with Radio Onda Cero, Rajoy claimed that Spain had created 1.75 million jobs since 2013. Rajoy has vowed to return the employment numbers to their pre-crisis level of 20 million.

Employment in Spain had dropped as low as 17 million during the crisis triggered by the post-2007 property bust, which kick-started a severe recession and banking crisis. The unemployment rate, which had reached an all-time high of 27 percent in the first quarter of 2013, has been on a path of slow but steady improvement ever since. With the GDP expanding by over 3 percent in each of the last two years, economists have attributed Spain’s economic recovery to external factors like low oil prices and interest rates, besides the decline in euro’s value and the efficiency of the structural reforms introduced by Rajoy’s government. This growth is expected to reach 3.2 percent for 2016, one of the best in Europe, as the Institute is due to release its official figures the coming week.

During the interview, Mariano Rajoy assured his countrymen that the economy remained on track to recovery and urged them to remain patient. “You cannot recover from five consecutive years of recession in just a quarter of an hour. But if we continue our current economic policies… we will get to 20 million employees.”

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