By Catarina Demony
LISBON (Reuters) - Unemployment in Portugal rose almost 9% in March from the previous month, official data showed, as lockdown measures to combat the spread of the coronavirus pandemic brought key economic sectors to a halt.
In the southern Algarve region, usually packed with tourists but now deserted due to the outbreak, the number of people registered as unemployed soared 41% in March compared to the same period last year, according to new data released by the Institute for Employment and Vocational Training on Monday.
Portugal has reported 20,863 coronavirus cases, with 735 deaths - a much smaller toll than in neighbouring Spain where more than 20,000 have now died of COVID-19.
Around 71% worked in the services sector, including in restaurants and retail stores, which have been largely shut since Portugal declared a state of emergency on March 18, since renewed until May 2.
According to the new data, 28,000 people in Portugal registered as unemployed in March, bringing the total of those registered without jobs to around 343,000. Year-on-year, unemployment rose 3% in March, the data showed.
The rate had been falling for several years as Portugal slowly recovered from a severe debt crisis. In 2008, during the economic recession, around 391,000 people were registered as unemployed.
The unemployment rate, currently at 6.5%, is expected to more than double to 13.9% this year due to the impact of the novel coronavirus, according to the International Monetary Fund.
Labour Minister Ana Mendes Godinho said on Monday that most companies have taken the government up on a short-term work subsidy scheme which allows them to suspend jobs or reduce working hours instead of firing workers.
"We are trying to ensure that even during a very difficult period in which companies are out of business, jobs are maintained," Godinho said.
One million people have been temporarily laid off under the scheme, she said.
Other government measures to bolster the finances of businesses during the outbreak include credit lines for hard-hit industries like tourism, textiles and agriculture.
"Our predictions point to a recovery around Easter of next year, and even then, it will be slow," Eliderico Viegas. President of Algarve's AHETA hotel association told RTP television.
"Loans that have to be paid back, with interest rates higher than what we faced before the crisis, are just not enough," Viegas added.