SPAIN’S economy continued its sharp decline in the first quarter of 2013, contracting by 0.5 per cent, official statistics have confirmed.
The total amount of goods and services exchanged in Spain shrank by two per cent in the year to March, after a 1.9 per cent fall in the 12 months before that.
This is the seventh quarter in a row without growth for Spain, with no end in sight to protracted recession, which the nation has now suffered for over a year.
The decline has been driven particularly by the construction sector’s dramatic collapse since the financial crisis. Spain had amassed a particularly large property bubble by the time the market began to crash in 2007.
Along with the economy’s general reduction, the Spanish statistical organisation confirmed that employment had decreased by 4.5 per cent, losing three quarters of a million full time jobs over the same period.
Unemployment in Spain reached 27 per cent in April. Yesterday, the Organisation for Economic Co-operation and Development’s also predicted a rise to 28 per cent in the next year. Youth unemployment stood at an eye-watering 57 per cent last month.
Yesterday, the European Commission extended the time limit for Spain to reduce its budget deficit to below three per cent by two extra years, to 2016.
Holger Schmieding, the chief economist of said that the performance of the Spanish economy was understandable given the scale of budgetary restraint already demonstrated. He said: “The pain in Spain is not over yet, but with around one per cent extra austerity per year until 2016, it will be much less than the three per cent fiscal hit last year”.