Rome, 22 Sept. (AKI) - Italy's unemployment rate rose to 7.4 percent in the second quarter of 2009, its highest level since 2005. The country's national statistics office ISTAT said on Tuesday employment fell sharply as the worsening recession affected the labour market.

The seasonally-adjusted unemployment rate rose to 7.4 percent from 7.3 percent in the previous three months to hit its highest level since the fourth quarter of 2005.

At least 378,000 jobs were lost in Europe's fourth-largest economy, which recorded a 1.6 percent decline in the employment rate compared to 2008.

The number of unemployed rose to 1.18 million from 1.7 million a year earlier as the country failed to recover from the worst recession since World War II.

The worst job losses were recorded predominantly in the less developed south of the country where 71 percent of the 378,000 total job losses were recorded.

Unemployment in the south is now at 12 percent, compared to 6.7 percent in central Italy and 5.0 percent in the north.

The country's employment rate thus now stands at 57.9 percent compared to 59.2 percent posted in the second quarter of 2008.