Portuguese jobless rate hits another record high

Portugal’s unemployment rate in the first quarter of the year hit yet a new record since the euro zone was established as the country remained in the grip of a deep recession.

According to figures released Thursday by the National Statistics Institute (INE), the number of people out of work in the period climbed by 3.1 percent from the end of December and was up 16.1 percent from the same period a year earlier. The jobless rate rose 2.8 percentage points from a year earlier and 0.8 points from the fourth quarter to 17.7 percent. Youth unemployment jumped to 42.1 percent from 40.0 percent in the fourth quarter.

“The situation is very serious,” Cabinet Secretary Luis Marques Guedes told reporters after the regular Thursday Cabinet meeting. “The government is putting all of its efforts into its program to boost the economy and allow companies to create jobs.”

The government has doubled its initial estimate for the decline in economic output for this year and now expects GDP to shrink 2.3 percent before returning to growth of 0.6 percent in 2014. The economy contracted by 3.2 percent last year, doubling the negative figure for 2011.

The administration has embarked on a draconian austerity drive to cut its budget deficit and meet the conditions of its 78-billion-euro bailout from the European Union and the IMF.