Regardless of improving growth conditions, Spain will face two more years of unemployment above 20%, according to BBVA analysts.
Though the bank envisions growth of 0.9%, which may add 100,000 jobs to the economy, it won’t be enough to lower the country’s incredibly high unemployment rate.
This could be devastating to Spain’s rebound. If the unemployment rate remains high, spending remains weak, and revenues remain small, the government will continue to struggle with its fiscal condition.
There are obviously quite a few problems facing Spain right now, notably its banking sector and continued struggle with real estate. A prolonged high rate of unemployment could endanger domestic stability, and the government’s adherence to the eurozone’s austerity objectives.