Unemployment in Greece will climb to 29.3 percent in 2013 and 31 percent in 2014, the German institute of macroeconomic forecasts IfW Kiel predicted on Tuesday.
The German institute’s economists also forecast the economic contraction to come to 4 percent next year and spill over into 2014 at a 1 percent rate, against a European Commission prediction for 0.6 percent growth in 2014.
In its revision of the Greek streamlining program, published in Brussels on Monday, the Commission had also been more optimistic in its estimates for the jobless rate, putting it at 24 percent for 2013 (from 23.6 percent in 2012) and 22.2 percent in 2014.
By contrast, using International Labor Office (ILO) methodology, the IfW Kiel economists expect the unemployment rate to come in at 24.6 percent at end-2012 before soaring to 29.3 percent in 2013 – higher even than Spain’s 27.9 percent rate. A rise in employment usually trails the economic growth rate by at least six months.
The IfW forecast mirrors that of the Labor Institute of the General Confederation of Greek Labor, which expects unemployment to top 30 percent next year.
IfW also sees inflation in Greece reaching 1.1 percent this year and turning into deflation of 0.6 percent in 2013.