The number of workers registered as unemployed in Spain increased by 124,890 in a single month to top 4 million in January, the Labour Ministry said on Tuesday.

The government expects unemployment to rise further, because the economy is still shrinking, but to peak later this year.

High unemployment is expected to make it difficult for the government to meet its promise to slash spending and reduce the budget deficit to 3 percent of gross domestic product in 2013 from 11.4 percent last year.

“January is a bad month for unemployment. Historically it rises in that month even when the economy is growing,” said Maravillas Rojo, head of the Labour Ministry´s employment department.

“The rise in joblessness is a very bad figure, but the tendency for the rise to slow, which began about a year ago in March, continues, although we have yet to hit the ceiling,” she said. January unemployment was 4.05 million, the ministry said.

Last week the National Statistics Institute, which uses a different methodology for its calculations, said unemployment rose to 18.8 percent in the fourth quarter of last year, with 4.3 million people out of work.

Economy Secretary Jose Manuel Campa said the jobless rate could hit 20 percent this year before gradually ticking lower.

On Friday the government will present a proposed labour reform aimed at reshaping the jobs market. Around 90 percent of those who have lost their jobs had temporary contracts.

Since January last year, the number of registered jobless has risen by 720,692. (Reporting by Jason Webb, editing by Tim Pearce)

via Spain January unemployment tops 4 million.