Spanish jobless rate dips to 25.98% as recession ends

MADRID (AFP) - Spain announced on Thursday a dip in its towering unemployment rate in the latest sign that the eurozone's fourth-largest economy is battling its way out of a long recession.

The jobless rate eased for the second straight quarter to a still high 25.98 per cent in the third quarter of 2013, a report by the National Statistics Institute showed.

The news dovetailed with a Bank of Spain assessment the previous day that Spain had emerged from recession in the third quarter with timid 0.1-per cent economic growth.

That was enough to send world stock markets higher as investors hoped for a broader recovery in the eurozone after five years of economic crisis.

The number of people out of work in Spain dipped by 72,800 to 5.9 million in the third quarter, lowering the unemployment rate from the previous quarter's 26.26 per cent.

It was the second straight quarter showing a drop in the unemployment rate, which peaked at a staggering 27.16 per cent in the first three months of 2013.

Spain is still struggling to overcome the aftermath of a decade-long property bubble that imploded in 2008, throwing millions of people out of work, racking up huge debts for the government, banks and people, and plunging the economy into a double-dip recession.

Prime Minister Mariano Rajoy's right-leaning government, which took power in December 2011, has enacted economic reforms and austerity policies so as to curb annual deficits and rein in the national debt.

But the painful impact of the spending squeeze, high unemployment, and a slew of corruption scandals have sparked angry street protests.

For young people, the employment news remains bleak with 54.39 per cent of 16- to 24-year-olds out of work, according to the latest report. Every member of some 1.8 million Spanish households is out of work, it said.

Mr Rajoy's government is promising better times ahead, however, forecasting an overall economic decline in Spain of 1.3 per cent in 2013 and then a return to growth of 0.7 per cent over 2014.

It forecasts an unemployment rate of 26.6 per cent this year and 25.9 per cent in 2014.

The International Monetary Fund has warned that Spain's unemployment rate will stay above 25 per cent until 2018 unless Rajoy's government undertakes deeper labour market reforms.

The positive data from Spain - which was a focus of anxieties for the eurozone's stability last year - reflected signs of recovery in European countries hit by the financial crisis, such as Greece, Ireland and Portugal.

France, the eurozone's second-biggest economy, has confirmed that it exited recession in the second quarter.

A recent estimate by statistics institutes in France, Germany and Italy forecast that the eurozone overall would return to timid growth of 0.1 per cent in the third quarter.