MADRID , Spain ( CNN ) -- Unemployment in Spain has reached 20 percent , meaning 4.6 million people are out of work , the Spanish government announced Friday . The figure , from the first quarter , is up from 19 percent and 4.3 million people in the previous quarter . It represents the second-highest unemployment rate in the European Union , after Latvia , according to figures Friday from Eurostat , the EU 's statistics service . Spanish Prime Minister Jose Luis Rodriguez Zapatero told Parliament on Wednesday he believes the jobless rate has peaked and will now start to decline . The first quarter of the year is traditionally poor for Spain because of a drop in labor-intensive activity like construction , agriculture and tourism . This week , Standard & Poor 's downgraded Spain 's long-term credit rating and said the outlook is negative . `` We now believe that the Spanish economy 's shift away from credit-fuelled economic growth is likely to result in a more protracted period of sluggish activity than we previously assumed , '' Standard & Poor 's credit analyst Marko Mrsnik said . Gross domestic product growth in Spain is expected to average 0.7 percent annually through 2016 , compared with previous expectations of 1 percent annually , he said . Spain 's economic problems are closely tied to the housing bust there , according to The Economist magazine . Many of the newly unemployed worked in construction , it said . The recession revealed how dependent public finances were on housing-related tax revenues , it said . Another problem in Spain is that wages are set centrally and most jobs are protected , making it hard to shift skilled workers from one industry to another , the magazine said . Average unemployment for the 27-member European Union stayed stable in March at 9.6 percent , Eurostat said Friday . That percentage represents 23 million people , it said . The lowest national unemployment rates were in the Netherlands and Austria , which had 4.1 and 4.9 percent respectively , Eurostat said . -- CNN 's Al Goodman contributed to this report .
Government estimates 20 million people are out of work in Spain . This is up from 19 percent and 4.3 million people in the previous quarter . Spain 's unemployment rate is second highest in Europe after France .