More than three quarters of Spain’s furloughed workers have returned to work since April, social security data showed yesterday as employment data in the eurozone’s fourth-largest economy improved.
Some 83,529 people left the ERTE furlough scheme in September, leaving 728,909 workers still enrolled, the data showed.
That is 76% lower than the April peak, when more than 3mn people were supported by the programme.
A total of 84,013 net jobs were created in September, up by 0.45% from August and marking the fifth consecutive month of job creation.
Increased hiring in education, agriculture and in the civil service more than offset the loss of 67,000 jobs in hospitality and commerce.
And the loss of employment that usually accompanies the end of Spain’s peak tourism season was less severe this year, as many would-be Spanish holidaymakers stayed at home — and spent money in Spain — because of coronavirus travel restrictions.
Even so, with 450,000 fewer net jobs than in September 2019, the job market has yet to return to its pre-pandemic levels.
Across Spain, the number of people registering as jobless fell by 0.69%, or 26,329 people, between August and September, leaving 3.8mn people out of work, according to the Labour Ministry.
Labour Minister Yolanda Diaz said it was the largest drop in jobless numbers recorded in any September since 1996.
Unemployment had risen by 0.79% in August as new outbreaks of the novel coronavirus and travel restrictions imposed by other countries took their toll after months of timid recovery from an initial lockdown.
Data on benefit spending, which lag labour statistics by a month, showed the cost of supporting Spain’s unemployed fell to €2.85bn ($3.34bn) in August from 3.18bn in July, with around 867mn spent on furloughed workers.
Meanwhile, Spain’s public debt soared in the second quarter to its highest level in at least 20 years as government spending rose sharply in an effort to tame the coronavirus pandemic, official figures showed on Wednesday.
Data from the Bank of Spain put total debt at €1.29tn ($1.5tn) or 110% of GDP, up from €1.22tn or some 99% in the first three months of the year.
For much of the second quarter, Spain was in lockdown with the economy put into “hibernation” to fight the spread of the virus.
In May, Spain’s government acknowledged that managing the pandemic would have a devastating effect on the public accounts, given the collapse in revenue during months of lockdown and the “sharp rise” in expenditure to offset the resulting economic crisis.
Government estimates see Spain’s debt-to-GDP ratio soaring to as much as 115.5% by the year’s end.
Over the same period, the annual public or budget deficit is seen rising to 10.3%, compared with 6.12% at the end of June, to produce the “biggest deficit since 2012”. The government has activated a number of key measures to mitigate the pandemic’s impact on the economy, notably an extended furlough scheme, which are set to cost the equivalent of 20% of this year’s GDP.
Although the state of emergency was lifted in late June, Spain is currently fighting a second wave of the virus which has now killed 31,000 people and infected more than 750,000, the highest infection rate within the European Union.
Spain plunged into recession in the second quarter when its gross domestic product tumbled by 18.5% due to the pandemic.
First-quarter growth fell 5.2%, with a recession commonly defined as two consecutive quarters of a contraction in GDP.