Lisbon. Portugal's unemployment rate in the fourth quarter and then rose to its highest level since last 13 years.
Today, the National Statistics Institute reported, the unemployment rate rose to 11.1%, from levels of 10.9% in the third quarter ago. This is the highest level at least since 1998 earlier. Meanwhile, the annual unemployment rate rose to a level of 10.1%.
The increase in unemployment comes amid budget cuts by government policy. Budget cuts that made Portugal was the biggest for more than three decades.
Bank of Portugal predicts the economy will experience a contraction of 1.3% in 2011. Meanwhile, Prime Minister Jose Socrates predicted economic growth of 0.2% in Portugal this year.
The government slashed salaries by 5% for public sector workers who earn more than 1,500 euros (U.S. $ 2,030) per month. In addition, the government also raised the sales of value added tax by 2% to 23%.
This step is to convince investors that Portugal can avoid a bailout and narrow the budget gap with other countries in the Euro area.
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