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Greek unemployment hits record as recession drags on

People stand outside an office of the Labour Force Employment Organization in the northern Greek port city of Thessaloniki, Jan. 10, 2013. Unemployment has reached new highs in Greece, with October 2012 figures showing the jobless rate at 26.8 per cent.

Nikolas Giakoumidis/AP

Greece's unemployment rate climbed to a record 26.8 per cent in October as the debt-laden country remained sunk in recession, data showed on Thursday.

Greece's jobless rate has almost tripled since it started rising in September 2009 as the country's debt crisis became apparent, and is more than double the average rate in the 17-nation euro zone, which stood at 11.8 per cent in November.

Unemployment among youth aged 15-24 also touched a new record of 56.6 per cent in October, compared with 22.1 per cent in the same month four years ago, statistics service ELSTAT said.

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A record 1.34 million Greeks were without work in October, up 38 per cent from the same month in 2011, it said.

After months of uncertainty over its future in the euro zone, Greece has managed to avoid bankruptcy but its economy is still sinking under austerity policies imposed by foreign lenders as the price for continued aid.

Fiscal austerity and record unemployment have put the squeeze on household budgets leading to a slump in consumer spending and lower imports, which is helping to narrow the country's current account deficit.

Greece may balance its current account for the first time in decades, its finance minister said on Thursday, noting that the gap shrank to 1.3 per cent of gross domestic product in the first 10 months of 2012, helped by a 13-per-cent rise in exports.

"The Greek economy will make a giant step to restore its competitiveness," Finance Minister Yannis Stournaras told the Greek-German chamber of commerce.

"If this trend continues it is probable that 2013 will be the first year after decades that the current account will be about balanced," he said.

The influential IOBE think tank on Thursday projected the economy would shrink 4.6 per cent this year, taking a slightly more pessimistic view than the government, which expects the contraction at 4.5 per cent, and the country's foreign lenders, who see it at 4.2 per cent.

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IOBE also predicted unemployment would rise further to 27.3 per cent this year, which is set to be the sixth consecutive year of recession.

However, spending cuts helped narrow the country's central government budget gap by 30 per cent in 2012 to €15.91-billion (12.83 billion pounds), the finance ministry said.

The central government budget figure excludes key elements of the general government budget, which is the figure used by the European Union to assess Greece's fiscal performance under its latest EU/IMF bailout program.

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