Spain’s jobless rate drops due to tourism recovery and less temp work

Spain's unemployment rate fell in the second quarter of 2022, data showed on Thursday, helped by a recovery in the tourism sector and reforms aimed at cutting the use of temporary contracts.

Published: 28 July 2022 11:17 CEST

Spain's jobless rate drops due to tourism recovery and less temp work

The number of job seekers in Spain fell below three million in May for the first time in 15 years.(Photo by LLUIS GENE / AFP)

Unemployment edged down to 12.48 percent in the second quarter from 13.65 percent in the previous three-month period, national statistics institute INE said in a statement.

The number of unemployed people fell by 255,000 in the second quarter to a total of 2.92 million, with the services sector leading job creation, it added.

Hotels, restaurants and bars have taken on more workers as Spain’s key tourism sectors continue to rebound following the end of most pandemic travel restrictions.

The improvement in the jobless rate has also been driven by a labour market reform which came into effect on January 1st and limits the back-to-back use of temporary contracts and makes permanent contracts the rule rather than the exception.

However, there are voices from within some of Spain’s trade unions and the PP opposition party that say that the new system is “perverting the figures” and “dressing up the reality”, as although many of these contracts are labelled as permanent, employees only work during certain months of the year.

The number of job seekers in Spain fell below three million in May for the first time in 15 years.

Economy Minister Nadia Calviño said Tuesday that the improvement in Spain’s labour market is “one of the motors” of the country’s economic growth.

She predicted Spain’s jobless rate would drop to 12.8 percent at the end of the year and to 12.0 percent in 2023.

At the same time, Calviño slashed Spain’s growth forecast due to the fallout of Russia’s invasion of Ukraine and higher interest rates.

Among western economies, Spain was one of the worst-hit by the economic fallout of the pandemic, with its gross domestic product collapsing by 10.8 percent in 2020, largely due to its heavy dependence on tourism.

Some half-a-million people lost their jobs in 2020 in Spain, which has one of the highest rates of unemployment in the OECD (Organisation for Economic Co-operation and Development).

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