EURUSD Euro Crisis Jobless, Economy Worsen
The European Union raised its unemployment forecast for the 17-nation euro zone economy next year to 12.2 percent from the previous 12.1 percent.
The European Commission had expected record euro zone jobless levels to fall next year but a weak recovery suggests overall numbers may yet cross the 20-million threshold.
The European Commission is forecasting that the recovery across the 28-country bloc will continue into the second half of the year, albeit at a tepid pace.
The executive arm of the European Union said in Brussels it expects the region’s economy to grow by 0.5 percent over the second half of the year and be flat for the whole year. In its previous forecast in May, it predicted a 0.1 percent annual decline.
It also expects the 17-country euro zone to continue its recovery from recession in quarterly terms. However, over 2013 as a whole, the euro zone is still expected to have contracted 0.4 percent. In 2014 though, it is penciling in 1.1 percent growth.
The euro zone’s unemployment is expected to remain at its record-high of 12.2 percent this year and next.
Spanish public finances are unlikely to reach EU norms by 2016, the European Commission said. Madrid’s public deficit is forecast at 5.9 percent next year and will rise to 6.6 percent in 2015, the EC said.
After nine quarters in a row of recession and soaring unemployment, the commission said weak tax revenues will make public finances vulnerable in the absence of a major pick-up to put the economy back on track.
The number of people registered as unemployed in Spain increased by a little over 87,000 in October as many jobs created in the summer tourist season come to an end.
The Labor Ministry said the October figure took the total number unemployed to a rounded 4.8 million. In October, like September, unemployment usually increases as the tourism sector reduces headcount ahead of winter.
Spain’s third-quarter unemployment rate of 26 percent _ the second highest in the 28-country European Union after Greece _ shows much more is needed for the economy to regain health.
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