Saturday 24 February 2018

Greece hit by yet more unemployment

German Finance Minister Wolfgang Schaeuble
German Finance Minister Wolfgang Schaeuble

Greece's jobless rate hit a record high of 27.9pc in June, data showed today, as the labour market continued to buckle in a deep recession with austerity policies linked to the country's bailout.

Unemployment rose from 27.6pc in May, and was more than twice the average rate in the euro zone of 12.1pc in July. The latest reading was the highest since Greek statistics service ELSTAT began publishing monthly jobless data in 2006.

Such data, however, tends to lag other growth indicators, which Eurobank economist Platon Monokroussos said were painting a slightly less bleak picture.

"Recent data for the annual change in employment and new private sector hirings suggest the jobless rate may be approaching a cyclical peak," he said.

Government officials have also suggested that there are tentative signs of Greece having hit bottom, including in unemployment.

Prime Minister Antonis Samaras said last week he believed the 2013 slump would be smaller than forecast and economic pain would ease next year.

A government official told Reuters on Monday the economy would shrink by less than 4pc this year versus the 4.2pc forecast by international lenders.

The government was now looking at a 3.8pc contraction this year, a government official said, confirming a report in financial daily Naftemporiki.

The ELSTAT figures showed a 1.2pc month-on-month drop in seasonally unadjusted unemployment, the biggest recorded since May 2008. This means that joblessness is set to fall in the coming months, according to a labour ministry official speaking to reporters on condition of anonymity.

Sustained month-on-month drops in seasonally unadjusted figures would point to a change in trend, ELSTAT said.

In addition, tourism, which accounts for about a fifth of Greece's economic output and one in five jobs is having a bumper season. Revenues are seen rising 10pc in 2013, to €11bn, with more than 17 million visitors - a record - expected.

The overall unemployment rate has nonetheless more than tripled since 2008, the start of a six-year recession which has wiped out about a quarter of Greece's economy.

Joblessness is a major headache for the government as it scrambles to hit fiscal targets and carry out structural reforms demanded by its international creditors.

YOUTH HARDEST HIT

Correcting Greece's economic imbalances has come at a very high cost. Data showed those aged 15 to 24 remained the hardest-hit as the jobless rate in this age group, excluding students and military conscripts, registered 58.8pc.

With the economy in its sixth straight year of recession and 1.4 million people officially without jobs, the pain is felt across the board with borrowers falling behind on loans and fewer workers paying into state pension funds.

A turnaround will take time to be felt in the labour market even if recovery sets in next year as authorities project. The central bank sees unemployment peaking at 28pc before it starts to decline in 2015.

The European Union and the IMF, which bankroll Greece, expect unemployment will average out at 27pc this year and ease to 26pc in 2014. Greece's largest private sector labour union GSEE has a more grim outlook, expecting it to climb to 29-30pc this year and hit 31.5pc in 2014.

Greece's anti-bailout leftists have taken a narrow opinion poll lead over Prime Minister Antonis Samaras's ruling conservatives, two opinion polls published today showed.

If elections were held today, the opposition Syriza party would get 29pc of the vote versus 28pc for Samaras's New Democracy party, a poll by public issue for Skai TV found.

A second poll by Pulse for the To Pontiki newspaper put support for Syriza at 23pc, giving it a 1.5 percentage point lead over New Democracy.

Reuters

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