Greece’s unemployment rate hit a new record in July with one in four now out of work, equalling the rate in Spain, as a crippling recession and austerity measures continue to take a toll on the labour market.
Unemployment rose for a 35th consecutive month to 25.1 per cent in July, more than double the eurozone average and up from a revised 24.8 per cent in June, Greece’s statistics service Elstat reported.
The jobless rate has more than tripled since the debt-laden country’s five-year recession began in 2008 and now stands at 54 per cent for those aged between 15 and 24 years, compared with 22 per cent in July 2008.
A record 1.26 million Greeks were without work in July, up 43 per cent from the same month last year. The slump in the Greek economy is expected to accelerate later this year if the government implements further budget cuts of almost €12bn (£9.7bn) over the next two years as a pre-condition for more funds under its EU/IMF bailout.
The IMF expects unemployment in Greece to climb to an average 25.4 per cent in next year. The jobless rate is now on a par with Spain, where unemployment stood at 25 per cent in July and had been the highest in the eurozone, according to Eurostat figures. The eurozone average rate was 11.4 per cent in July.
Budget cuts imposed by the European Union and the International Monetary Fund as a condition for saving Greece from a chaotic default have aggravated a wave of corporate closures and bankruptcies.
Credit to companies has been shrinking because the country’s banks depend on the European Central Bank for liquidity and cannot fund firms. Greece’s economy is estimated to have shrunk by about a fifth since 2008 and more than 600,000 jobs, more than one in 10, have been shed in the process.