(RTTNews) - Spain’s unemployment rate is likely to rise further in the coming months, but at a slower pace, economists at BNP Paribas said.

The firm expects the jobless rate, on average, to go up to more than 18% in 2009 and nearly 21% in 2010. In the third quarter, the jobless rate stood at 17.9%.

According to official data, unemployment increased 2.7% month-on-month in October, after a 2.2% rise in September. Year-on-year, the number increased 35.1%, but slower than the 41.3% rise in September. In October, there were 3.9 million unemployed persons.

The increase in unemployment, combined with the payment of the new 420-euro unemployment benefit to unemployed, whose right for the ordinary unemployment benefit has expired, is likely to contribute to the sharp increase in the public deficit to almost 10% of GDP in 2009, BNP Paribas said.

However, the report noted that the month-on-month rise in unemployment was due to seasonal factors, with October generally corresponding to end of seasonal contracts in agriculture. In this sector, unemployment grew 12.5% in October after a 0.4% rise in the previous month.

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Posted in Categories: Economy, Eurozone, Releases.

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