Spain’s Unemployment Rate Reaches 14%

Bloomberg News reports that Spain’s economy contracted 1% from the previous quarter and 0.7% from a year earlier, the National Statistics Institute said. Growth in Spain, which outpaced the euro zone for more than a decade on a debt-fueled construction boom, will contract 2% this year as the budget deficit swells to more than twice the European Union limit of 3%, according to the European Commission. Spain now accounts for almost all the increase in joblessness in the euro zone, with an unemployment rate of 14%, almost double the EU average.

The country’s automobile industry, which had contributed about 5% of gross domestic product, accounts for part of the jump in unemployment as car sales plunge and export demand weakens. Nissan Motor has said that it would cut 38% of the work force at a Spanish factory, and Renault won approval for temporary layoffs of as many as 10,311 employees in Spain.