Live News From Spain As It Happens

Spain's economic problems were put in sharp relief Friday as figures showed unemployment is near 25 percent, a day after a credit ratings agency downgraded the country's debt rating and warned it faces an uphill battle to get a grip on its finances.

Official figures showed that unemployment has spiked to 24.4 percent in the first quarter of 2012 -- the highest rate in the 17-country eurozone -- from 22.9 percent in the fourth quarter of 2011. It said another 365,900 people lost their jobs in the first three months of the year, taking the total unemployed to 5.6 million.

The figures represent another blow to the conservative government after Standard & Poor's late Thursday became the first of the three leading credit rating agencies to strip Spain of an A rating. It cited a worsening in the budget deficit, worries over the banking system and poor economic prospects for its decision to reduce the rating by two notches from A to BBB+.

S&P even warned that a further downgrade is possible as it left its outlook assessment on Spain at "negative."

Read more at businessweek.com

Spanish unemployment has hit a new record high, official figures have shown.

The number of unemployed people reached 5,639,500 at the end of March, with the unemployment rate hitting 24.4%, the national statistics agency said.

The figures came hours after rating agency Standard & Poor's downgraded Spanish sovereign debt.

Official figures due out on Monday are expected to confirm that Spain has fallen back into recession.

Earlier this week, the Bank of Spain said the economy contracted by 0.4% in first three months of this year, after shrinking by 0.3% in the final quarter of last year.

Other figures released on Friday showed that Spanish retail sales were down 3.7% in March from the same point a year ago, the 21st month in row sales have fallen.

Read more at bbc.co.uk

Spain will still struggle to meet this year's deficit target despite steep budget cuts announced on Friday and it will have to dig just as deep to meet 2013's goal, a serious challenge as the economy enters recession.

The euro zone's fourth largest economy has been the focus of debt market attention since the bloc's debt crisis began on fears of the cost of Greek-style bailout if sliding investor confidence pushes lending costs up to unsustainable levels.

Central governments savings worth over 27 billion euros ($35.96 billion) announced on Friday were well received by Europe, which has demanded the deficit be reduced by 3.2 percentage points this year, and the markets, helping prompt a euro rally.

Read more at Reuters.com