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UPDATE 1-Greek unemployment rises to 8.6% in June, seen up

Published 09/10/2009, 05:47 AM
Updated 09/10/2009, 05:48 AM

* Unemployment rate rises to 8.6 pct in June

* Youth unemployment at 22.9 pct

* Economists expect jobless rate to rise further

(Adds economist comment, details)

ATHENS, Sept 10 (Reuters) - Greece's unemployment rose to 8.6 percent in June, climbing 1.3 percentage points compared to the same month a year earlier as economic activity slowed, the country's statistics service (NSS) said on Thursday.

NSS said the number of people officially unemployed went up by 67,729 from June last year.

Greece's economy is feeling the impact of the global downturn after years of robust growth, with tourism and construction, two of its biggest drivers, in weaker shape this year. Greek unemployment figures are not seasonally adjusted.

"The June reading shows that even though unemployment is rising, Greece has avoided horror scenarios of massive unemployment so far, probably because GDP was still expanding in the second quarter," said economist Sebastian Wanke at Dekabank.

"But given that unemployment is a lagging indicator, we expect it to rise further by about one percentage point by the end of this year and exceed the 10 percent mark by the end of 2010".

The jobless rate in the 16 countries sharing the euro stood at 9.4 percent in June, according to Eurostat, and worsened further to 9.5 percent in July.

"Greece's labour market continues to feel the impact of slowing economic activity. The stabilisation of expectations regarding tourism seemed to have contained job losses, especially flexible job types," said economist Nikos Magginas at National Bank.

"We see this year's unemployment rate reaching 9.5 percent as economic activity will remain in negative terrain in the second half," he said.

Major Greek companies, such as cooler maker Frigoglass and Emporiki Bank , have announced job cuts to cope with the downturn. Others, like aluminium products maker Alumil , are cutting working hours and reducing pay.

Greece's restrictive labour laws particularly hit the young. The jobless rate in the 15-24 age group rose to 22.9 percent from 22.3 percent in June 2008.

Youth unemployment was partly blamed for Greece's worst riots in decades in December 2009, prompted by the police killing of a teenager. (Additional reporting by Harry Papchristou, Renee Maltezou) (Reporting by George Georgiopoulos; Editing by Toby Chopra)

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