The economy shrank at a quarterly rate of 0.4 percent in the third quarter, the same pace as in the previous three months, the Bank of Spain said, citing provisional data.
“The Spanish economy continued on a path of contraction which began a year earlier,” it said.
If confirmed, the figures would mean that the Spanish recession, which has left one in four workers unemployed, is moving into a second year at a relentless pace.
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Protesters demonstrate outside the parliament in Madrid on Tuesday. (AP-Yonhap News) |
The eurozone’s fourth-largest economy, which emerged from the previous recession only at the end of 2010, began gently shrinking in mid-2011 and has slumped in every quarter since by as much as 0.5 percent.
Spain has agreed to a $125 billion rescue loan for its banks, of which it plans to use only 40 billion euros.
But world markets now anticipate a broader sovereign bailout, after the European Central Bank in early September outlined plans to make unlimited bond purchases to bring down stricken states’ borrowing costs.
Investors are wary of betting against the European bank, which could step in whenever Spain decides formally to request help from the eurozone’s bailout fund and to submit to its conditions.
That threat helped Spain’s Treasury to beat its fund-raising target in an auction of three- and six-month bills on Tuesday, raising 3.58 billion euros.
The interest rate edged up for the three-month bills and eased for the six-month bills from a similar auction Sept. 25.
Prime Minister Mariano Rajoy’s right-leaning government has issued a 2013 budget based on a forecast of economic contraction of just 0.5 percent next year, a figure widely seen as overly optimistic.
Budget Minister Cristobal Montoro told parliament, however, that the budget would help make next year “the last year of recession.”
Moreover, the central government was “very close” to meeting it 2012 deficit target of 4.5 percent of GDP, recording a shortfall of 3.9 percent of GDP for the year to September, he said. (AFP)
