(MENAFN- AFP) Spain's unemployment rate fell for the second straight year in 2014 to 23.7 percent as an economic recovery gained pace, but remains at one of the highest levels in the European Union, official data showed Thursday.
Joblessness fell from 25.73 percent in 2013 as the country's large services sector took on more staff, driven by a strong tourist season and construction activity also picked up, the National Statistics Institute said.
The fall was greater than what had been expected by Prime Minister Mariano Rajoy's conservative government, which had forecast the country would end 2014 with a jobless rate of 24.2 percent.
The Spanish economy, the eurozone's fourth-largest, has enjoyed modest but steady growth since emerging in mid-2013 from its second recession after the collapse of a property bubble in 2008 which brought Spain to the verge of default.
The statistics office said employment increased by 433,900 in 2014. By sector employment increased by 344,200 in services, 98,000 in industry and 40,000 in construction.
The government estimates the economy will have expanded by 1.4 percent in 2014 and will grow by 2.0 percent in 2015, a faster growth rate than is expected in France, Germany and Italy.
It sees Spain's unemployment rate easing to 22.2 percent at the end of 2015.
A total of 5.46 million people were unemployed in Spain at the end of 2014, according to the statistics office.
The jobless rate remains the highest in the European Union after Greece's, which stood at 25.8 percent at the end of October.
Rajoy, who is facing a general election at the end of the year, credits a 2012 labour law reform which has made it easier for employers to lay off workers or reduce their wages, thus reducing their risk in creating jobs.
Unions say the reforms unfairly favour employers and destroy hard-fought rights and have only helped create low wage jobs.
The International Labour Organization is more pessimistic than the government when it comes to job creation in Spain.
In its latest forecasts published on Tuesday it predicted Spain will have a jobless rate of 23.8 percent at the end of 2015. It sees the country's jobless rate remaining above 20 percent until the end of the decade.
Spanish bank BBVA forecasts it will take 8-10 years for Spain's jobless rate to return to the levels close to those that existed before the property bubble collapsed.
Spain's unemployment rate stood at 8.57 percent in 2007.
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