Weak jobs data, sliding retail sales and rising inflation confirm Spain’s economic recovery is faltering.
The official figures released on Friday showed 21.3 three percent of the workforce without a job, up from 20.3 percent at the end of last year. That is a 14 year high according to Spain’s National Statistics Institute.
The country’s unemployment rate is Europe’s highest and getting worse but the Madrid government is not convinced all those people really are jobless and on Friday it launched a crackdown on the black economy, with increased fines for companies that pay workers under the counter to avoid tax and social security.
Commenting on the latest figures, Spanish Labour Minister Valeriano Gomez said: “With an unemployment total of over 4.9 million and a jobless rate exceeding 20 percent there is no government that would be happy with the current situation.”
At the same time it was revealed that retail sales in Spain fell 8.6 percent year-on-year in March and inflation hit 3.5 percent in April.
The government, struggling with the euro zone’s third largest deficit, is hoping the crackdown on the underground economy – with bigger fines and more inspections – will raise billions.
Spain’s tax inspectors’ union estimates undeclared earnings amount to 82 billion euros a year.