Unemployment in Spain has fallen to its lowest point since 2009, as the economy continues its slow recovery.
The jobless rate fell to 18.63 per cent in the fourth quarter of 2016, capping a fall in unemployment of more than two percentage points over the year, according to Spain’s National Institute of Statistics (INE).
This corresponds to an extra 428,500 public sector jobs since 2015.
Along with Greece, Spain was one of the hardest hit large European economies as the Eurozone debt crisis hit. Unemployment peaked at well over a quarter of the labour force in 2013, when the EU was forced to bail out its banks.
Greece’s total unemployment is still higher, at 23 per cent of the labour force.
However, Spain’s young people are still suffering heavily from the crisis, with a still staggering youth unemployment rate of 44.4 per cent, even higher than Greece. The UK, in contrast, has a youth unemployment rate of 12.8 per cent, while Germany’s is only 6.7 per cent.
The damage caused by this high youth unemployment is expected to affect growth prospects in the long term for the nation.
This scarring effect, in which damage done to the economy weighs on long-term prospects, is known as hysteresis by economists. Some economists expect this to affect Spain’s productivity as skills are not developed in early careers, and therefore the country’s future growth potential.