The Spanish economy will slip back into its second recession in two years during the first quarter with a contraction of 0.2 percent, the country's second-largest bank, BBVA, forecast Wednesday.

For the year as a whole the bank predicts gross domestic product will shrink by 1.3 percent.

"The available information allows us to predict that growth will be negative in the first quarter. Only external demand prevents a deeper contraction," BBVA said in its latest economic bulletin.

The Spanish economy declined 0.3 percent in last quarter of 2011 from the previous three months, the first such contraction since the end of 2009, according to official figures.

A recession is officially defined as two consecutive quarters of negative growth.

Economy Minister Luis de Guindos predicted in an interview published Sunday that Spain's economic contraction would deepen in the first quarter and he said the economy would likely contract by around 1.5 percent during all of 2012.

"The first quarter of the year is going to be hard, even harder than the last quarter of 2011, with a decline in GDP of more than 0.3 percent. I think the second quarter will also be negative," he told daily newspaper El Pais.

BBVA said the economy would post a slow recovery in 2013, with growth of 0.6 percent "which could pick up speed if the structural reforms announced by the government are sufficiently ambitious."

Spain emerged only at the start of 2010 from an 18-month recession triggered by a global financial crisis and a property bubble collapse that destroyed millions of jobs and left behind huge bad loans and debts.

The country's jobless total hit 5.27 million people at the end of 2011, pushing the unemployment rate to 22.85 percent, the highest level among members of the Organisation for Economic Cooperation and Development.

BBVA predicted the unemployment rate will rise to 24.6 percent in 2013.