Greek unemployment soars in March, industry slumps

March jobless rate hits 16.2 per cent, a new record
||Last Updated: 06/08/2011

ATHENS (Reuters) — Greece's jobless rate hit a new record in March and industrial output sank by some 11 per cent on the year in April as cutbacks to rein in its huge debt burden deepened an economic recession.

Unemployment rose to 16.2 per cent from 15.9 per cent in February and has now risen by more than one-third since the same month a year ago, figures from statistics service ELSTAT showed. It was the highest reading since Greece started compiling monthly data in 2004.

Output numbers showed the manufacturing sector shrinking by 11.3 per cent, extending an overall decline which saw production fall by almost six per cent last year.

"The pace of deterioration in the labour market is continuing unabated with employment shrinking 5.4 per cent year-on-year," said economist Nikos Magginas at National Bank.

"Although month-on-month there appears to be some favourable effect from the start of seasonal hirings which should become more felt in April and last throughout the summer months."

Greece is suffering its deepest downturn in almost 40 years, hurt by higher indirect taxes and cuts in public sector pay and pensions to shore up finances and meet the terms of its 110 billion euro EU/IMF bailout.

Unemployment remains lower than that of fellow euro zone member Spain — 21.3 percent in the first quarter of 2011 — but is more than double the European Union average and is likely to fuel growing popular discontent over the government cuts.

A record 811,340 people were officially without work in March, a 40.2 per cent year-on-year increase and a 3.1 per cent rise from February. The rate was as high as 42.5 per cent for the 15-24 age group and 22.6 per cent for those aged 25 to 34.

The number employed shrank 5.4 per cent year-on-year or by 238,574 people to 4,185,325, according to ELSTAT.

Magginas said he expected the jobless rate to start stabilising in the second quarter. The European Union expects it to average out at 14.6 per cent this year and hit 14.8 per cent in 2012.

At least 80,000 Greeks crammed a central Athens square last Sunday to vent their anger over the nation's economic malaise as unease grows over the prospect of more belt-tightening to secure continued funding by the country's international lenders.

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