To the naked eye, new data from Spain’s National Statistics Institute appears positive. The unemployment rate in the second quarter was 26.3%, down from 27.2% in the first three months of the year. However, the difference barely matters. Spain’s jobs situation is as severe as that in the United States during the Great Depression, but the European nation lacks a colossal economic engine to pull it out of its trouble.
The BBC pointed out that the slight improvement may be due to the fact that the second quarter is tourism season. If that is true, the tick higher will quickly fade.
The extent to which Spain is hampered from improving its employment position is considerable. Its debt-to-GDP ratio is among the highest in Europe and is rising more quickly than most, up 15.2% from the first quarter of 2012 to the first quarter of this year. No matter what else this does to harm Spain’s economy, it most certainly means that austerity measures will remain in place as many alarmed officials in the European Union, particularly in Germany, try to force Spain to cut its way to prosperity.
Eurostat reports that GDP per capita in Spain is also weak, a sign that a consumer-based recovery is unlikely. Spain’s ratio is 97%, compared to that of 121% in Germany. Worst of all, Spain’s gross domestic product contracted 0.5% in the first quarter, and it also fell in each of the final three quarters of 2012.
Taken in sum, these economic figures show how desperately Spain needs outside help to keep from becoming barely a developed nation.
As if matters could not worsen, the current level of unemployment in Spain among its youth is double. An entire generation of people will suffer double-digit joblessness for what likely will be several years. These people will lack the income to be consumers and will continue to drag on whatever government assistance survives austerity.
There is no information about Spain’s economy that could lead a rational outsider to believe that the jobless rate will drop to below 25% in the foreseeable future.
Take Charge of Your Retirement In Just A Few Minutes (Sponsor)
Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance—and SmartAsset’s simple quiz makes it easier than ever for you to connect with a vetted financial advisor.
Here’s how it works:
- Answer a Few Simple Questions. Tell us a bit about your goals and preferences—it only takes a few minutes!
- Get Matched with Vetted Advisors Our smart tool matches you with up to three pre-screened, vetted advisors who serve your area and are held to a fiduciary standard to act in your best interests. Click here to begin
- Choose Your Fit Review their profiles, schedule an introductory call (or meet in person), and select the advisor who feel is right for you.
Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.