Spain – GDP contracts in first quarter

The National Statistics Institute have released preliminary figures showing the country’s GDP contracted 0.3% during the first quarter, less than previously expected.

The contraction is the same as for the previous quarter and is 0.1% less than the decline predicted by the Bank of Spain a week earlier.

The interannual GDP variation was –0.4%, as compared with 0.3%, for the previous quarter. This was due to the negative contribution by domestic demand, partly compensated by the positive contribution of foreign demand.

Mariano Rajoy’s conservative government are struggling to convince investors that is can meet it’s deficit targets and get hold of spiralling unemployment. It predicts a contraction of 1.7% this year  and growth of 0.2% in 2013.

Economists predict that things are likely to get worse before they get better pushing unemployment to even more dramatic highs.

These are preliminary results. The complete tables and charts of the Spanish Quarterly National Accounts for the First quarter of 2012 will be published by the INE on May 17th.

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