Spain: Depressed consumption drags economy deeper into recession
January 30, 2013
In the fourth quarter, GDP contracted 0.7% over the previous quarter in seasonally adjusted terms, according to preliminary data released by the National Statistics Office (INE) on 30 January. The figure, which exceeded the Bank of Spain's estimate of a 0.6% contraction, represented the sharpest decline recorded since the second quarter of 2009 as draconian austerity measures and rampant unemployment continue to drag on domestic demand. On a positive note, the external sector continued to contribute positively during the final quarter of 2012.
On an annual basis, GDP declined 1.8% over the same quarter the previous year, a deterioration over the 1.6% decline recorded in the third quarter. As a result, the economy contracted 1.4% in 2012, contrasting the 0.4% expansion seen in 2011.
The government expects the economy to contract 0.5% this year.