Unemployment Rate in Iceland up to 5.4 Percent

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Unemployment Rate in Iceland up to 5.4 Percent

According to yesterday's numbers from the Directorate of Labor, 8,935 people are unemployed in Iceland and the unemployment rate currently measure 5.4 percent, up from 3.3 percent in November.

A construction site in Iceland in 2004. Copyright: Icelandic Photo Agency.

Unemployment in Iceland increased by 75 percent between October and November of this year, which translates to 2,339 individuals losing their jobs. In December 2007, the unemployment rate only measured 0.8 percent, Morgunbladid reports.

The rate is expected to increase to 5.7 percent in 2009 and therefore, according to a new budget bill, contributions to the unemployment benefits fund will increase.

After the economic crisis hit Iceland with full force after the country’s three largest banks, Glitnir, Landsbanki and Kaupthing, were nationalized, the situation of Icelandic companies worsened quickly. Construction companies have received the worst blows.

Jóhanna Harpa Árnadóttir, chairman of the Engineers Association of Iceland (VFÍ), said many engineers are beginning to look for jobs abroad. Tens, even hundreds of engineers have received letters of resignations.

“The blows that the Icelandic economy has suffered have been particularly harsh for engineers and technologists […]. On the other hand it says a lot about the skill of Icelandic engineers and technologists that we have been contacted by foreign companies that would like to hire them,” Árnadóttir said.

Click here to read more about unemployment in Iceland.