Spain Business
Spain Business Brief - Monday August 4 2008
By h.b.
Aug 4, 2008 - 7:05 PM

Unemployment rose by nearly 37,000 people in July, 1.5% more than in June and making the fourth consecutive monthly increase. The rate is now at its highest since April 1998, and has been described as ‘bad news’ by the Minister for Tax and the Economy, Pedro Solbes.
There are now a total number of 2,426,916 registered out of work in Spain according to the numbers from the Ministry for Employment. Since July last year unemployment has increased by 456,578 – 23.1% with the construction industry seeing the largest number of lay-offs.

Solbes was more optimistic though about inflation and thinks that it might have reached its high in July, given the falls in crude prices which are now down almost 30 dollars in a month, and back below 120 dollars a barrel for the reference ‘Brent’.
Solbes said that he thinks that the IPC in Spain will end the year at about 4%, if petrol prices are at about 130 $, but despite that the Minister for Tax and Economy also admitted that GDP could increase this year by less than the predicted 1.8%.
The International Monetary Fund is also predicting a reduction in inflation.

The increase in unemployment is having an effect on consumer confidence with the ICO index reaching a new minimum in July.

The latest opinion poll by the Centre for Sociological Investigation, CIS, has seen the Partido Popular cut the previous six point lead for the PSOE Socialists to reach a dead heat on intention to vote.
The Socialists have seen support fall by 3.1% to 39.5% while the PP has seen support increase by 1.7% to 39.3%. The difference is within the margin for error.

Plans for privatisation are set to see the closure of the least profitable airports in Spain. The claim was made by Esteban González Pons, the Deputy Communications Spokesman for the Partido Popular, who lamented that the Government’s decision to privatise 30% of the Spanish Airport Authority, AENA would lead to the closures. He said he was also against the decision to give the running of Barajas and El Prat airports to the Madrid and Catalan regional governments.

A new study by the Ministry for Hacienda, has found that 84% of Civil Servants in Spain do not feel motivated in the carrying out of their work. The report reveals that things are not helped by an unfriendly working environment, a lack of recognition for their work, and a wage they consider to be below their expectations.