Spain's jobless rate topped 20% in the first quarter, official data showed today, fuelling fears over the country's public finances which have rattled global financial markets.
The number of unemployed jumped by 280,200 to 4.61 million, more than in Germany which has nearly twice Spain's population, for a jobless rate of 20.05%, the national statistics institute INE said. The unemployment rate rose from 18.83% in the fourth quarter.
The last time unemployment topped 20% in Spain was in the fourth quarter of 1997 when it hit 20.11%.
Economy and Finance Minister Elena Salgado said the pace of job losses was 'much less pronounced' than during the first quarter of 2009.
'But that does not hide the gravity of these figures and the government's determination to devote the necessary effort to create jobs,' she said.
Spain's jobless rate has soared since the global credit crisis hastened the collapse of its labour-intensive construction industry at the end of 2008.
The country's unemployment rate is double the record high of 10% posted in the entire 16-nation euro zone in March, according to figures released today by the European Union's statistics office Eurostat.
The rise in unemployment means Spain's government, which has vowed to protect social welfare spending, will face an even bigger bill for jobless benefits as it tries to rein in a public deficit that hit 11.2% of output last year.
Ratings agency Standard & Poor's cut the country's long-term sovereign credit rating on Wednesday to 'AA' from 'AA+' amid concerns about the country's growth prospects, sending the euro and global stock markets tumbling on fears Madrid faces similar problems to debt-stricken Greece.
The Spanish economy, Europe's fifth largest, contracted 0.1% in the fourth quarter from the previous three months, despite the entire eurozone, the US and Japan emerging from recession.
Spain has proved especially vulnerable to the global credit crunch because growth relied heavily on credit-fuelled domestic demand and a property boom boosted by easy access to loans that has collapsed.
Prior to the crisis, it is estimated that 30% of Spain's working population worked directly or indirectly for the construction industry.