Spain Jobless Stuck in Double Digits Without Action, IMF Warns

(Bloomberg) --

Spain’s unemployment rate will remain stuck at one of the highest levels in the developed world if the government doesn’t act decisively, the International Monetary Fund has warned.

At nearly 14%, the rate is among the highest in the OECD. “Unemployment, which halved from its post-crisis peak, has almost reached its estimated structural rate and is forecast to decline only marginally,” the IMF said on Wednesday as part of its annual review of the country.

Spanish officials should focus on reducing the prevalence of temporary contracts and putting in place more targeted and “modernized” labor market policies. Those contracts have left many in a precarious position in the event of an economic downturn, as they have limited job security.

The coronavirus outbreak means the outlook for this year is “now highly uncertain,” the IMF said, echoing warnings coming from institutions and central banks around the world. “The magnitude of the slowdown hinges on the scope and the duration of the outbreak.”

To contact the reporter on this story: Jeannette Neumann in Madrid at jneumann25@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Jeannette Neumann

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