Spanish unemployment reached 26.02 percent in December 2012 with 5.9 million people out of work, according to data published on Thursday by the Spanish National Institute of Statistics (INE).

It is the first time unemployment passed the 26 percent mark in Spain.

Unemployment increased by 187,000 during the last quarter of 2012, partly due to many temporary summer contracts in the holiday and tourism sector ending.

A total of 691,800 people lost their jobs during 2012 and as a result, the unemployment rate rose from 22.85 percent at the start of the year to 26.02 percent by its end.

The government's policy of fiscal control and spending cuts had a serious effect on public sector jobs which were reduced by 6.98 percent over the course of the year in comparison with a 4.3-percent reduction in the private sector.

The number of families with all their members unemployed increased by 258,700 over 2011 reaching a new high of 1,833,700.

Meanwhile, youth unemployment in Spain stood at 55.13 percent, with 930,200 youngsters out of work.

The IMF predicts Spain's economy will shrink by a further 1.5 percent in 2013.