Unemployment in Greece reached 16.6 % in May 2011, the highest figure reported since Greece began publishing monthly figures in 2004.

Data from national statistics agency Elstat today indicated that unemployment in Greece rose to 16.6 per cent from 15.8 per cent in April 2011 as job cuts in the wider Greece economy outweighed a rise in seasonal tourism.

The figure is eight points higher than the 15.8 % reported a month earlier, according to a report published Thursday by the Greek statistics service. The reading was sharply higher than in the same period last year, when it stood at 12 %. Greek unemployment numbers are not adjusted for seasonal factors.

Greece Unemployment : Young Greeks hit hardest

The number of economically active people without jobs rose to 822,719, reflecting an increase of 220,534, which is 36.6 % higher than in May 2010.

Young people were the hardest-hit, with unemployment rates as high as 40.1 %. The young continued to be the hardest-hit among working class, with the jobless rate in the 15-24 age group exceeds 40 %, twice as high as in May 2008.

Greek Economy : Origin of Crisis is EU and IMF bailouts

Considered by many as the point of origin of the current debt crisis, Greece was forced to resort to bailouts from the European Union and International Monetary Fund in exchange for drastic austerity measures.The debt-choked country is in its third year of recession, with employment taking a hit as companies shed jobs and many shops close.

“Employment is shrinking at the fastest annual rate ever recorded because of increased uncertainty amid the ensuing recession in Greece economy,” informed Nikos Magginas, an economist at National Bank of Greece.

“Despite an improvement in tourism, it is hard to see a significant reversal in the upward trend for unemployment in the coming months,” stated Mr Magginas, who expects the rate to exceed the 17 % mark at the end of 2011.

Greece economy in biggest recession ever

The Greek economy shrinked at an annual pace of 5.5 % in the first quarter. Second quarter figures are due tomorrow, with Greek economists expecting a quarter-on-quarter contraction of 0.9 %.

As well as fuelling unemployment, the recession in Greece economy has also hit government revenues, causing the central government deficit to widen by a quarter in the first seven months of the year, data inicated.

A record 822,719 people were without work in May, 37 % more than in the same month last year. The number in work dropped to a record low of 4,131,528, down 6.8 % year-on-year.

Rules that make it hard to hire and fire workers have helped make joblessness among the Greek young more than 15 percentage points higher than the euro area average, according to OECD figures.

Greece Debt pressurized more by EU and IMF bailouts

Pressured by its international backers under an EU-IMF bailout agreed last year, Greece attempts to make its labour market more flexible. The measures taken in that direction include introduction of salaries below the minimum wage for people getting their first job, wage bargaining at an individual company level and the softening of collective dismissal rules at larger companies.

The average jobless rate in the 17 euro countries  held steady in May at 9.9 %.

The austerity moves include wage cuts of up to 20 % for public workers, hiring freezes in state companies, and higher taxes, among others in Greece.

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