English.news.cn 2012-04-30 19:10:30
MADRID, April 30 (Xinhua) -- Spain's National Institute of Statistics (INE) on Monday confirmed the country's economy is back in recession.
The Spanish economy contracted by 0.3 percent during the first quarter of 2012, the second successive quarter of negative growth.
The results were slightly better than forecasts by the Bank of Spain estimating the economy would shrink by 0.4 percent.
The INE pegs the double dip recession, following the first recession in the summer of 2008, to a fall in internal demand. With 5.6 million people out of work and the number expected to grow in the coming months, internal demand is weak as Spaniards adopt a "wait and see" attitude towards new purchases, while banks remain reluctant to grant loans or mortgages.
The INE will publish its complete data on May 17.
The Spanish government expects the economy to shrink by 1.7 percent this year, followed by marginal growth of 0.2 percent in 2013.
This contrasts with the more pessimistic predictions of the Foundation of Spanish Savings Banks that believes the recession will continue well into 2013 with the economy contracting by a further 1.5 percent.
Related:
MADRID, April 30 (Xinhua) -- Rating agency Standard and Poor's on Monday cut its rating of 11 Spanish banks, while placing a further five on negative outlook, as official statistics suggested the country has fallen back into recession.
S&P announced its decision less than a week after it lowered its rating on Spain's sovereign debt by two notches from A to BBB+, citing a worsening budget deficit, worries over the banking system, and poor economic prospects. Full story
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