Spanish retail sales fell by a record 9.8 percent in April from a year earlier, as the country’s second recession since 2009 hurts consumer spending, the National Statistics Institute said today.
According to the Associated Press, the fall was the 22nd straight monthly decline and was more than double the 3.8 percent fall recorded in March.
And in more bad news for the already stricken economy, the Bank of Spain said the country would sink deeper into recession in the second quarter, Bloomberg reported.
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Agence France-Presse said the sharp fall in retail sales was due to the economic contraction, government austerity measures and higher taxes which have squeezed household budgets and left consumers with less money to spend on clothes, electronics and entertainment.
The Spanish government has introduced tough austerity measures in an attempt to reduce its heavy debt burden. At the same time, it has tried to reassure investors that its banking system will not require a European bailout.
Spain’s borrowing costs soared to the highest level this year on Monday after Bankia, the country’s fourth largest lender, requested an additional government injection of 19 billion euros, or nearly $24 billion. That is on top of the 4.5 billion euros it received earlier this month.
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Investors are worried about how Madrid will fund the bailout, which is the country’s biggest ever bank rescue.