Managing Director of the International Monetary Fund (IMF) Christine Lagarde, said on Monday Spain needs to deepen labor reform in order to reduce labor costs.
According to local media reports, Lagarde made this statement at the Global Forum Spain that is being held in Bilbao with an aim to discuss important issues about European and global economy.
Lagarde said there was no need to reduce salaries in order to reduce labor costs, but encouraged the Spanish government to reduce tax costs and increase training for the unemployed.
Spain's unemployed population stood at 4.8 million in January.
She said unemployment was too high and economic growth too low as Spain grew by 0.1 percent in the third quarter and by 0.2 percent in the fourth quarter in 2013.
Lagarde said there was scope to improve.
She also urged Spain to help enterprises to restructure their debt and make it easier for Spaniards to create businesses.
Meanwhile, the Spanish Minister of Economy and Competitiveness Luis de Guindos said the country was experiencing a "slight economic recovery" and highlighted the importance of continuing with the reforms.
He emphasized that Spain will create net employment in 2014 for the first time in many years.