Spain says economy ‘touches bottom’

MADRID. – Spain’s government said yesterday the two-year recession has touched bottom after the eurozone’s fourth largest economy eked out a sixth straight month of shrinking jobless queues in August. The total number of registered unemployed – 4,7 million in raw figures – was basically unchanged, according to a Labour Ministry report.
But a fall of just 31 people from the previous month was enough for the Spanish government to hail a sixth consecutive month of declines, and the first drop in the month of August since 2000.

“I think we have touched bottom,” Economy Minister Luis de Guindos said.
“Although the task ahead of us is huge, I would say these are encouraging figures,” he told Spanish radio Cadena Ser.

“They show something that we expected, that there is a stabilisation of the labour market, there is much less destruction of jobs.”
When the latest job figures were adjusted to smooth out seasonal variations, the number of claimants fell by a more substantial 13 700 people to 4,87 million. The government and financial markets usually focus on the raw figures rather than the seasonally adjusted data.

Spain’s state secretary for employment, Engracia Hidalgo, said the figures were coherent with other positive economic indicators such as improving sentiment and competitiveness “together with an increase in the credibility of our economy”.

Spain is still struggling to overcome the aftermath of a decade-long property bubble that imploded in 2008, destroying millions of jobs and sending debt levels soaring.

The economy has been shrinking for two years.
Official data based on a broader household survey show the unemployment rate hit 26,26 percent in the second quarter of this year, slightly below the record 27,16 percent posted in the first quarter.

The International Monetary Fund released a report last month warning Spain it faces five more years with an unemployment rate topping 25 percent unless Madrid enacts new reforms including measures to help firms slash wages instead of axing staff.

Prime Minister Mariano Rajoy’s government is forecasting a jobless rate of 26,7 percent in 2014 and 25 percent in 2015. – AFP.