The urban unemployment rate in Latin America and the Caribbean has climbed slightly to 8.5 per cent in the second quarter of 2009, with the United Nations forecasting that rate will stay constant through the end of the year.
This marks a 1 per cent rise in unemployment from last year, which means that 2.5 million more people have joined the 18.4 million people out of work in the region, according to a bulletin published by the UN Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labour Organization (ILO).
The second quarter saw exports contract in response to sluggish demand on global markets, while remittances and foreign direct investment also plummeted due to the global financial turmoil, it said yesterday.
“Since the end of 2008, the countries of the region had started to implement countercyclical policies – albeit with significant differences – in an effort to use public spending to counter flagging investment and consumer-spending levels and boost aggregate demand,” according to the bulletin, the second joint effort by the two UN agencies.
Gross domestic product (GDP) has contracted nearly 2 per cent in the region so far this year,
Labour-market trends observed in the first half-year, together with the forecast for a 1.9 per cent decline in regional GDP in 2009, suggest that the average annual rate of urban unemployment in the region will be close to 8.5 per cent.
“Youth have paid a high cost for the crisis or economic slowdown, given that unemployment among youths has increased significantly,” the bulletin said.
But it said that there are signs that the worst of the economic crisis has already been seen in mid-2009, with signs of recovery, including an end to production declines.
“Public investment can undoubtedly be a powerful tool for creating jobs and boosting the economy in times of crisis,” ECLAC and ILO said, also calling for emergency employment programmes.
Boosting public investment to spur job growth entails a lag, they said, underscoring the need for speeding up projects and execution of existing resources in the short term.