Spain in double-dip recession
Cranes stand idle at an empty shipyard in Vigo due to a loss of orders on April 27, 2012. Spain’s jobless rate soared to a record 24.4 percent in a deepening recession in the first quarter, data showed today, piling on the misery hours after a sharp credit-rating downgrade.
Spain's economy entered a second recession according to Monday data, Reuters reported.
Saddled with worsening credit ratings, Spain is undergoing "government spending cuts in an uphill battle to trim the public deficit likely to delay any return to growth," Reuters wrote.
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The country has been struggling to meet European demands to shed debt and reduce government spending. Spain fared poorly when a housing bubble there burst, and it has been struggling economically for four years.
The Washington Post reported last week that Spain's credit rating was downgraded to just three levels above "junk" amid a slew of other bad news: nearly one in four Spaniards are without a job, and the picture is even worse for younger people. More than half of Spanish people under the age of 25 are jobless.
“The figures are terrible for everyone and terrible for the government,” said Spain's Foreign Minister, Jose Manuel Garcia-Margallo. “Spain is in a crisis of enormous magnitude.”
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Spain's national bank estimated the economy contracted 0.4 percent last quarter, and new data today from the country's statistics office estimated the contraction was 0.3 percent, BusinessWeek wrote.
"While 1.73 million households have all their members out of work," BusinessWeek wrote, "families that do have income have been hit by tax increases and may see their wages fall after changes to labor rules made it easier to renegotiate contracts."