Spanish central bank said Tuesday unemployment was projected to rise to 27.1 percent by end of this year. Joblessness make up quarter of total workforce now.
The bank said in a statement that unemployment might, however, decline to 26.8 percent in 2014.
It added that Spain's Gross Domestic Product (GDP) would retreat by 1.5 percent by end of this year but would rebound by 0.6 percent in 2014.
The bank's projections are more pessimistic than the government's figures, which showed economy declining by 0.5 percent this year and growing by 1.2 percent by end of next year.
The bank meanwhile said general deficit would decrease to six percent end of 2013.
The European Commission had predicted Spanish GDP declining by 1.4 percent in 2013.