Greek unemployment hits record 16.3 per cent

Nearly one-third of people under 30 out of work
By George Georgiopoulos and Renee Maltezou
||Last Updated: 09/15/2011

ATHENS  (Reuters) — Greece's jobless rate hit a new record in the second quarter of 2011 as austerity policies aimed at slashing the budget deficit deepened the recession and led to more job cuts, according to recent data.  

Employment is suffering as the Greek economy remains stuck deep in recession for the third straight year. The government projects a 5.3 per cent contraction in GDP this year.

Higher taxes and cuts in public sector pay and pensions, all aimed at shoring up public finances and meeting the terms of a 110 billion euro EU/IMF bailout, have taken their toll on economic activity.

The jobless rate rose to 16.3 per cent from 15.9 per cent in the first three months of the year and 11.8 per cent in the second quarter of 2010, according to figures from statistics service ELSTAT. Almost one-third of people aged 29 and under are out of work.

"The deterioration in the labour market picked up in the second quarter, with unemployment not only hitting the usual vulnerable groups — women and young people — but also male heads of households aged 30 to 65," said National Bank economist Nikos Magginas.

He said the strong performance of the tourism sector in the third quarter would be the main factor mitigating the deterioration in the labour market, which is expected to continue in the next year.

ELSTAT said 810,821 people were officially without work in the second quarter, a 36.5 per cent year-on-year increase and a 2.3 per cent rise from the first quarter.

The number of those employed shrank 0.9 per cent quarter-on-quarter to 4,156,336, with job shedding affecting all sectors of the economy, ELSTAT said.

Young people were hardest hit, with the jobless rate reaching 32.9 per cent in the 15 to29 age group.

"Most recent signs suggest that the jobless rate has not yet reached a cyclical peak," said EFG Eurobank economist Platon Monokroussos.

The average unemployment rate in the 17 countries using the euro was 10 per cent in June, according to Eurostat.

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