Greek Unemployment Hit New High In October: Recession May Last Through 2014

 @moranzhang
on January 10 2013 9:40 AM
Greece
The formation of a new Greek government Wednesday staves off fears of a swift departure from the euro zone by the Hellenic Republic. But this week's election and installation of a new administration merely extends the country's economic death spiral as its economic woes remain deep and pervasive. REUTERS

Greece’s unemployment rate extended its record high, climbing to 26.8 percent in October as the country heads into a sixth year of recession, official data showed Thursday.

The Statistical Authority said 36,219 people lost their jobs in October, bringing the total to 1.35 million. That amounts to 26.8 percent of the population that is eligible to work, up from 26.2 percent in September. October’s jobless rate is the highest since the agency began publishing monthly data in 2004.

Greece's unemployment rate has almost tripled since September 2009 as the country's debt crisis emerged, and is much higher than the euro zone average, which stood at 11.7 percent in October.

Young Greeks are the worst affected, with 56.6 percent of those aged between 15 and 24 out of work, compared with 22.1 percent in the same month four years ago, statistics service ELSTAT said.

Greece has been dependent on international rescue loans since May 2010. Austerity policies -- spending cuts and tax increases -- imposed by the bailed-out country's international lenders to shore up public finances have plunged Greece into a recession. The country’s economic slump deepened in the third quarter of 2012, with output shrinking 7.2 percent on an annual basis.

Separate data released Thursday showed consumer prices fell 0.3 percent in December from November, pulling the annual rate of inflation down to 0.8 percent from 1 percent in the prior month. The December inflation rate is the lowest since September 2009, which suggests weak consumer demand.

Greece's economy is expected to shrink by 4.6 percent in 2013, after contracting by an estimated 6.6 percent last year, the Athens-based IOBE think tank said Thursday.

"The forecast is slightly worse than the government's prediction of a 4.5 percent GDP decline," the think tank said in its report.

The European Union and the International Monetary Fund bailing out the country expect the economy to contract 4.2 percent in 2013.

Morgan Stanley this week forecast Greece’s economy will not rebound in 2014 but instead faces one more year of recession amounting to a 1 percent decline in growth.

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