MADRID — The number of unemployed people in Spain rose to a record four million in the first quarter as the economy continued to shed jobs created over the last decade by inexpensive credit and a real estate bubble.

People lined up in Madrid on Friday to enter a Spanish government job center. The number of unemployed people in Spain rose to a record

The Spanish unemployment rate climbed to 17.4 percent, from 13.9 percent in the final quarter of 2008, or more than twice the European Union average, the National Statistics Institute said Friday. The 802,800 increase in the ranks of the jobless was the largest quarterly increase in more than 30 years.

“These figures are bad and worse than expected,” the finance minister, Elena Salgado, said. The sharp quarterly increase was a sign of “how severe and how deep the crisis is,” she said.

Spain’s grim employment news came as Britain’s national statistics office on Friday reported a 1.9 percent drop in gross domestic product in the first quarter from a year earlier, the largest quarterly decline in output recorded since 1979.

It was the third successive quarter of economic contraction in the British economy and cast doubt on projections last week by Alistair Darling, the British chancellor of the Exchequer, that the economy would start to recover by 2010 after shrinking 3.5 percent this year.

“These figures make his forecasts very difficult to achieve,” said James Knightley, a senior economist for ING in London. He said he expected the British economy to shrink 4 to 4.5 percent this year and predicted that Britain’s broad-based decline, with a steep 6.2 percent drop in manufacturing, would be reflected across Europe and the United States.

Amid the gloom from Britain and Spain, data from Germany offered a bright spot Friday, suggesting that confidence in the economy might be turning the corner. The Ifo Institute in Munich said corporate sentiment rose in April to its highest level in five months. The business climate index, based on a poll of around 7,000 companies, rose to 83.7, from 82.2 in March, according to Reuters.

Meanwhile, President Nicolas Sarkozy of France announced a plan to spend more than 1 billion euros ($1.32 billion), on youth job initiatives in a move to counter a potentially explosive rise in unemployment among people under 25, Reuters reported on Friday.

In Spain, Ms. Salgado said she expected unemployment to rise more slowly in the coming months as government employment programs took effect. The government has announced stimulus measures of about 71 billion euros this year in an effort to replace jobs lost in construction and help businesses get credit.

But economic analysts said the government’s optimism had little credibility given the consistent discrepancy between its projections and the economic reality. The labor minister, Celestino Corbacho, predicted in January that unemployment would not reach four million, while the central bank this month said it would reach a maximum of 17.1 percent this year.

Debate continued this last week in Spain — and elsewhere — about how much the government could afford to stretch its budget deficit to stimulate the economy and cover the costs of supporting the unemployed.

The Bank of Spain has warned of little room for additional spending, with Spain’s public sector deficit on track to hit 8.3 percent of G.D.P. this year and its ratio of debt-to-G.D.P. set to reach 50 percent. The bank’s governor, Miguel Fernández Ordóñez has said that the social security system could go into deficit this year.

But José Antonio Herce, chief economist at Analistas Financieros Internacionales, a financial consultancy, said new stimulus packages were needed.

“There is a little margin to spend more, and what margin there is should be exhausted on productive infrastructure that will help the economy in the long term,” he said, adding that there was room to increase Spain’s budget deficit by about two more points of G.D.P. “What we need next is for the government to produce a clear plan which explains to the taxpayer how it is going to fix this mess — going all the way through till 2019.”

www.nytimes.com/2009/04/25/business/global/25euecon.html