World Economy

Spain's QI Growth Positive

Spain sees unemployment edge up in first quarter.
Spain sees unemployment edge up in first quarter.

Spain's statistics agency says the economy grew 0.8% in the first quarter, keeping it as one of the fastest growing in the European Union. The National Institute of Statistics said Friday that over the year the country's GDP expanded by 3%.

It was Spain's 14th consecutive quarter of growth. The run followed a grueling five-year financial crisis that ended late 2013. The economy grew 3.2% in 2016 and is expected to expand by 2.5% this year, AP reported.

The conservative government of Prime Minister Mariano Rajoy has made economic growth and job creation its main policies since taking office in 2011.

According to Spain’s quarterly labor market report, released on Thursday, there are now 4.25 million Spaniards looking for work—down more than half a million over the past 12 months but a small increase compared with the end of December. Spanish retailers and service providers often hire seasonal labor to help with the busy Christmas period, but return to normal staffing levels in January.

Officials and analysts said the small increase in jobless numbers had been expected, and that Spain’s economic recovery—also in the labor market—remained on track. According to the latest estimate from the Bank of Spain, national output is on course to increase 2.8% this year, significantly ahead of the European average. The bank also expects the unemployment rate to decline further, to 16.7% at the end of this year and 15.4% at the end of 2018.

“The first quarter is typically a bad quarter. The good news is that growth forecasts for the Spanish economy have been revised upwards recently, which suggests we will see a return to growth in the labor market in the coming months as well,” said Marcel Jansen, a professor of economy at the Autonoma University of Madrid.

Like many experts, Prof Jansen pointed to the quality of new jobs being created as the real area of concern. “There has been an enormous increase in short duration work contracts and job rotation. About 26% of contracts signed now last less than a week and 40% of contracts last less than a month,” he said.

“For many people in Spain the labor market is like a game of musical chairs: they run around, sometimes they find a seat and sometimes they don’t. But they never stay for long and even when they have a job it doesn’t mean they have escaped the risk of low income or even poverty.”


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