Spain unemployment drops below 25% for first time in two years

With 17.4 million Spaniards now in work, Spain’s economy is at the healthiest it has been for two years

Spain’s jobless rate has ducked under 25 per cent for the first time since 2012 as the country’s economic recovery has gathered pace.

The second quarter of the year generated an extra 402,000 jobs in Spain, dragging the unemployment rate down to 24.5 per cent. During the first three months of the year the average unemployment rate hovered around 25.9 per cent…

Although slight, this is the first sustained fall in the Spanish unemployment figures for many months, and is perhaps the surest indicator yet that the labour reforms introduced in late 2012 have had the desired effect.

However, Spain’s 5.6 million unemployed remains one of the highest in the Eurozone.

“These figures are much better than expected, and while there’s an important seasonal element, seasonally adjusted figures are also strong,” Citi economist José Luis Martínez said.

In 2007, Spain’s job sector appeared to be one of the most dynamic in Europe, with unemployment rarely edging above seven per cent, which is about the same as Germany’s jobless rate today. Since then, however, recession has struck twice, austerity policies have bitten and previously soaring sectors have stalled, such as the construction and real estate industries.

Spain’s central bank has reported that the economy is now growing at its fastest rate since 2008, and will continue to increase by 1.3 per cent for the remainder of 2014 and by as much as two per cent in 2015.

“Spain has turned into one of the fastest-growing economies in Europe,” said leading economist at London’s Berenberg bank, Holger Schmieding.

The upturn in Spain’s economic fortunes is reflected in many economies across Europe and the Eurozone, with the UK, France, Italy and Ireland sharing Spain’s recovery to varying degrees.