topics
tools
Expatica countries
Index Last Var.(%)
BEL 20 2304.58 1.43
DAX 6766.67 1.67
IBEX 30 8861.2 1.01
CAC 40 3427.92 1.52
FTSE 100 5901.07 1.81
AEX 326.33 1.01
DJIA 12862.23 1.23
Nasdaq 2905.66 1.61
FTSE MIB 16439.62 1.00
TSX Composite 12577.28 0.19
ASX 4320.1 -0.30
Hang seng 20756.98 0.08
Straits Times 2917.95 0.58
ISEQ 20 506.95 2.24
You are here: Home News Spanish News Spain still in recession as economy shrinks 0.3 pct

Spanish News

archive
Enlarge font Decrease font Text size


13/11/2009Spain still in recession as economy shrinks 0.3 pct

Spanish Economy Minister is satisfied the GDP is contracting at a slower pace and expects things to pick up in the next quarter.

Madrid – Spain's economy contracted in the third quarter, although at a slower pace than in previous quarters, official data showed Thursday, contrasting with a return to growth elsewhere in Europe.

Gross domestic product declined 0.3 percent from the previous quarter, its fifth straight quarterly contraction, and was down 4.0 percent from a year earlier, the National Statistics Institute said in preliminary figures.

It follows a contraction of 1.1 percent in the second quarter, 1.6 percent in the first quarter, 1.1 percent in the three months to December and 0.6 percent in the third quarter of 2008.

The statistics office said the slowdown in the pace of economic contraction was due to "a less negative contribution of domestic demand and a positive contribution of exterior demand" as government stimulus measures helped smooth the decline in activity and a return to growth in other nations aided exports.

Economy Minister Elena Salgado said she was "satisfied" with the figures.

"We expect that the results of the next quarters with our predictions and they will be better," she told reporters as she entered parliament.

The government expects the economy, Europe's fifth largest, to shrink 3.6 percent this year and return to growth by the second half of 2010.

The latest quarterly results leave Spain, along with Britain which unexpectedly slumped 0.4 percent in the third quarter, as the only large European economies still stuck in recession, usually defined as a drop in GDP for two or more consecutive quarters.

The European Commission forecasts the entire 16 member eurozone likely expanded during the third quarter.

Eurozone heavyweights France and Germany will publish third quarter GDP data on Friday. Both nations posted surprise economic growth in the second quarter of 2009, meaning their recessions were technically over.

The Spanish economy has proved especially vulnerable to the global credit crunch because its growth relied heavily on credit-fuelled domestic demand and a property boom boosted by easy access to loans that has collapsed, leaving around one million new homes unsold.

Prime Minister Jose Luis Rodriguez Zapatero's Socialist government has responded to the economic slump by putting in place a stimulus plan worth more than two percent of GDP this year which it says is the largest in Europe.

The plan includes a massive works programme, which has torn up vast swatches of Spanish cities as workers extend or repair roads and pavements. That however failed to prevent the jobless rate from soaring.

Spain's unemployment rate has doubled over the past two years to hit nearly 18 percent, the highest level in Europe, with construction workers leading the job losses.

The country of just over 46 million people accounts for roughly half of the rise in the number of jobless in the euro zone over the last year, according to the European Union's statistics office Eurostat.

At the height of its 15-year boom, Spain was creating about half of all new jobs in the eurozone, which drew millions of immigrants, especially from Latin America and Eastern Europe.

The sharp economic slowdown has caused Spain's public deficit to balloon as tax receipts fall and government spending on stimulus measures and unemployment benefits soars.

The government, which posted budget surpluses between 2004 and 2007, predicts the budget deficit will hit 9.5 percent of GDP this year.

The European Commission on Thursday gave Spain an additional year -- until 2013 -- to bring its budget deficits back under the European Union limit of 3.0 percent of GDP.

AFP / Expatica


0 reactions to this article

Be the first person to add a comment

General rating: Not rated yet

Rate article:    Add my rating


0 reactions to this article

Be the first person to add a comment
Discussion Forums

Jobs in Spain

Teaching English

Community Noticeboard Spain

Republicans Abroad Europe

Jobs in Spain

Bilingual People Fair Barcelona Feb 11th 2012

Eating & Drinking in Spain

Matsuri: best Japanese restaurant ever in Barcelona!

Student forum Spain

Barnatalent: Develop Your Talent In Barcelona!

participate in the forums

Inside Expatica
Editor's Guide: Getting Started in Spain

Editor's Guide: Getting Started in Spain

Expatica's Getting Started section will provide practical information on how you can open a bank account, exchange your driving licence, improve your Spanish, and more.

Groups and Clubs in Madrid

Groups and Clubs in Madrid

Here's a guide to an extensive list of groups and clubs in Madrid for expats, from sports groups to social and family gatherings.

Groups and Clubs around Spain

Groups and Clubs around Spain

A brief introduction to our Tax section for Spain, from help with inheritance tax to accounting advice.

Groups and Clubs in Barcelona

Groups and Clubs in Barcelona

Here's a short introduction to our Banking section for those living in Spain, from what to ask the experts to opening a Spanish bank account.