Spanish economy shrinks faster

AFP, 30 July 2012

MADRID, July 30 (AFP): Spain’s downturn deepened in the second quarter, with the economy shrinking 0.4 per cent after contracting 0.3 per cent in the first three months of 2012, official data showed Monday.

The figures from the national statistics institute INE confirmed Bank of Spain data issued last week, compounding the problems the government faces in an economy expected not to return to growth until 2014.

INE said the second quarter outcome reflected “weaker domestic demand which was offset in part by a positive contribution from external demand.”

Earlier this month, the government said the economy would remain in recession next year, shrinking 0.5 per cent instead of growing 0.2 per cent as previously expected.

The economy was tipped to shrink 1.5 per cent this year, with unemployment hitting an unprecedented 24.6 per cent, it said.