The Bank of Spain has today confirmed that Spain is technically in a recession after the economy shrank by 0.4% in the first quarter of 2012, further evidence that the downturn is continuing in Spain.
Following a decline of 0.3% in the fourth quarter of 2011 a second consecutive month of economic contraction is technically a recession.
The government already knew this as they have said the economy is still shrinking and predict it will shrinnk by a futher 1.7% this year.
To try and slow the contraction they have approved labor market reforms, new banking regulations and employment law but still Mariano Rajoy’s government are warning Spain to prepare for a rough patch as things are likely to get worse before they get better. Worse than 24% unemployment? Worse than 50%+ youth unemployment? Worse than 50 billion euros of cuts? Maybe it’s time to leave Spain.
The figures released by the central bank are preliminary figures with the official GDP results due to be released by the National Statistics Institute later this month. I will of course bring you details.