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Spain jobless rate nears one quarter of workforce

MADRID -- Spanish unemployment is now near one quarter of the workforce, fuelling fears the country might need a costly bailout as the IMF issued its latest report on the eurozone's fourth biggest economy.

The unemployment rate rose in the second quarter to 24.63 percent of the workforce and to a huge 53 percent among the young, despite the start of the tourist season, figures from the national statistic office showed on Friday.

The increase in the overall jobless numbers was smaller than in the first quarter however, with the number of eligible people out of work rising to nearly 5.7 million people.

Between April and June, 53,500 people lost their jobs in Spain, compared with 365,900 in the first quarter, the national statistics office said.

The unemployment rate rose from 24.4 percent in the first quarter — already the highest in the industrial world — as Spain entered its third straight quarter of economic contraction.

And the International Monetary Fund warned Friday that the Spanish recession would be worse than initially expected, with a forecast contraction of 1.7 percent this year and of 1.2 percent in 2013.

Official Spanish economic growth figures for the second quarter are expected on Monday.

Spain's economy is reeling in the aftermath of a decade long real estate boom that crashed with the debt crisis, bringing the Spanish financial sector to the brink of insolvency.

Under pressure from European authorities who have agreed to bail out Spanish banks, Spain's conservative government has approved tens of billions of euros' worth of spending cuts, tax hikes and other measures.

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