ECONOMY

Jobless rate hits record high

Greece’s growing army of unemployed workers hit a record high in August, figures showed yesterday ahead of more data expected to show that the economy is deep in the doldrums. The unemployment rate jumped to 12.2 percent from 12 percent in July as austerity measures aimed at slashing the budget deficit led to job cuts, the Hellenic Statistical Authority (ELSTAT) said. It is the highest reading since Greece started compiling monthly jobless data in 2004. A record 613,108 people were without work, 35 percent more than in August 2009. Unemployment has hit young people the hardest, with the jobless rate reaching 30.8 percent in the 15-24 age group and 16.4 percent for those aged 25 to 34. Workers in construction, tourism and retail businesses have been particularly affected. Greece’s jobless rate was the fourth highest in the 16-member eurozone after Spain, Slovakia and Ireland and 2.2 percentage points above the bloc’s average. The European Union and International Monetary Fund expect Greek unemployment to rise to 14.5 percent next year. Employment is expected to suffer as the Greek economy goes through its deepest recession in almost 40 years, partly due to austerity policies needed to shore up the country’s finances and avoid a debt default in exchange for an 110-billion-euro EU-IMF bailout. ELSTAT is scheduled to release data today showing that the economy slumped by 1.4 percent between July and September on a quarterly basis, according to a survey of five economists put together by Reuters. Year-on-year, gross domestic product shrank 4.6 percent, with the downturn accelerating from a 3.7 percent contraction in the second quarter, based on the survey. «The intensification of the fiscal consolidation effort, coupled with poor private sector sentiment, amplified recessionary pressures. Improving export activity will only slightly ameliorate the downward momentum in domestic demand, with GDP contracting by about 4.3 percent year-on-year in the third quarter,» said economist Nikos Magginas at National Bank. He expects the economic downturn to bottom out in the second half of 2011.