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Dhaka Tribune

IMF warns of tough Spain jobs outlook

Update : 04 Aug 2013, 08:38 AM

The IMF told Spain on August 3 that it faces five more years with an unemployment rate topping 25% as it pressed Madrid to enact new reforms including measures to help firms slash wages instead of axing staff.

Spain's economy, the fourth largest in the eurozone, has been shrinking for two years and official data show the unemployment rate hit 26.26% in the second quarter of this year, slightly below the record 27.16% posted in the first quarter.

The outlook for Spain's economy, the fourth largest in the eurozone, is "difficult and risks are high," the International Monetary Fund's annual report said, predicting a 1.6% economic contraction this year, zero growth in 2014 and growth of just 0.3% in 2015.

"The weak recovery will constrain employment gains, with unemployment remaining above 25% in 2018," said the report compiled by IMF staff. The Washington-based institution said it expected the Spanish unemployment rate to hit 27.2% this year, then dip to 27% next year, 26.9% in 2015, 26.6% in 2016, 26% in 2017 and 25.3% in 2018.

In its previous World Economic Outlook report in April, the Fund had said it expected the jobless rate to dip below 25% two years earlier, declining to 24.7% in 2016.

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