Spain plunges deeper into recession in Q2
31 Jul 2012
Spain, eurozone's fourth-largest economy, which has been struggling under the debt crisis further slid deeper into recession in the second quarter, after registering economic contraction in the previous two quarters, according to data released by the National Statistical Institute yesterday.
The economy shrank 0.4 per cent in the second quarter over the previous quarter and a full 1 per cent compared with a year ago. It contracted 0.3 per cent each in the first quarter of 2012 and the fourth quarter of 2011.
The data is in line with the central bank's growth figures reported last week. (See: Spain's economy sinks further amid growing bailout fears)
Technically, two consecutive quarters of economic contraction signals recession.
The institute said that the economy was hurt by weakening domestic demand, only partially offset by a positive contribution from exports. The complete report on gross domestic product will be out on 28 August.
The government now expects the nation's economy to continue to shrink in 2013 as well, contrary to an earlier perception of a nominal expansion, as consumers and businesses rein in spending and investor confidence is waning.
