Business, Economics and Jobs

Spain: Recession easing, 2nd-quarter numbers show


People queue to enter a government employment office as it opens on December 4, 2012 in Madrid, Spain. Spain's registered unemployment figures rose by 74,296 hitting a new record of 4.91million as Labor Ministry said today in Madrid. Current unenployment rate is Spain is at 26 percent.


Pablo Blazquez Dominguez

Spain’s painful recession is easing, according to preliminary second-quarter data announced by the Bank of Spain on Tuesday.

Spain has been in recession since mid-2011, and its economy did contract again between April and June this year. But the contraction has slowed, central bank officials noted.

In the second quarter, Spain’s economy likely contracted 0.1 percent from the first quarter. In the first three months of the year, the economy contracted 0.5 percent from the previous quarter.

Gross domestic product likely contracted 1.8 percent compared to the second quarter of 2012. In the first quarter, GDP shrank 2 percent year-on-year.

The central bank said an increase in demand for Spanish exports gave the economy a boost.

Not all analysts are convinced Spain is out of the woods yet.

"We expect weak demand in Spain's major export destinations to mean that the boost from the external sector will fade over the coming quarters," Ben May, economist at London-based Capital Economics, wrote in a research note, according to Agence France-Presse.

"And with the fiscal squeeze, housing slump and private sector deleveraging set to continue for some time to come, domestic demand is likely to contract significantly further."

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