‘Spain economy to shrink in 2nd quarter’ - Gayo Lues

Spain’s central bank stated in a report on Tuesday that the country’s ailing economy will shrink in the second quarter of 2012, with the recession expected to carry until at least mid-2012.

“Available indicators for the second quarter are still scarce but they do anticipate that activity will continue contracting in this period,” the Bank of Spain stated.

Official data has revealed that the economy shrank 0.3 percent in the last quarter of 2011 and again by the same amount in the first quarter of 2012.

Experts say the shrinking economy will put more people out of work, with the unemployment rate currently at 24.4 percent – the highest in Europe.

The current economic crisis in Spain has prompted the government to implement reforms in the financial sector, and austerity measures hitting citizens most.

Tens of thousands of people across Spain have staged dozens of demonstrations against the harsh austerity measures imposed by the government since last year.

Battered by the global financial downturn, the Spanish economy collapsed into recession in the second half of 2008, taking with it millions of jobs. Earlier this month, Spain fell back into recession.

The worsening eurozone debt crisis has raised Spain’s financing costs amid concerns that the country might have to seek a European Union bailout, like Greece.

GMA/JR/IS