June 5, 2014 / 10:22 AM / in 4 years

Greek jobless rate dips in March, but still EU's highest

ATHENS (Reuters) - Greek unemployment eased marginally in March, data showed on Thursday, but the jobless rate stayed the highest in the European Union as the country struggles to emerge from a devastating recession.

Unemployment dropped to 26.8 percent from an upwardly revised 26.9 percent in February, Greek statistics service ELSTAT said.

A stubbornly high jobless rate has blighted government efforts to reform an economy that has shrunk for the past six years amid successive waves of fiscal austerity.

Last month Prime Minister Antonis Samaras outlined an ambitious economic model focused on exports to kickstart growth and create thousands of jobs.

Reforms to shore up sectors including tourism, fish-farming, food processing, logistics, energy and pharmaceuticals could add 54 billion euros to GDP and generate 770,000 jobs in the next seven years, he said.

The March unemployment rate was the lowest in over a year, easing from the record 27.9 percent hit last September.

But more than one in four remain out of work - more than three times the 2008 rate, the highest level in the EU and more than twice the euro zone’s average, which reached 11.7 percent in April.

Hardest-hit from joblessness are those aged 15 to 24. Their jobless rate, excluding students and military conscripts, registered 58.3 percent in March, compared with 23 percent when the financial crisis started.

Athens and its international lenders expect the economy to pull out of recession this year, growing by 0.6 percent.

When Greece’s economy grew at rates of 3 to 5 percent, it created about 50,000 jobs annually on average. That suggests that, with 1.27 million people officially out of work, a turnaround in the labor market will take many years even if the recovery sets in this year.

“The gradual decline of unemployment from the peak hit last September is continuing. Looking ahead, we expect the rate to decline by about one percentage point by the end of this year on the back of recovering economic activity,” said Platon Monokroussos, an economist at Eurobank. Leading economic indicators, such as manufacturing activity and economic sentiment, have also shown improvement.

Reporting by George Georgiopoulos: editing by John Stonestreet

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