Wednesday, September 26, 2012

Spain’s economy shrinks quickly in third quarter of 2012: Bank of Spain

People stand in line at a government employment office in a suburb of Madrid. (File photo)

Source: Press TV

The Bank of Spain has announced that the debt-wrecked country’s economic output is shrinking at a “significant pace” in the third quarter of 2012.

“Available data for the third quarter of the year suggest output continued to fall at a significant pace, in an environment in which financial tension remained at very high levels,” the bank said in a monthly report released on Wednesday.

As official data indicated, Spain, the fourth-largest economy in the eurozone, slid into recession in the last quarter of 2011.

Spain’s government is also expecting an economic decline of 1.5 percent this year, and another 0.5 percent in 2013, but many analysts believed that even those gloomy figures are optimistic.

The International Monetary Fund (IMF) has predicted economic declines of 1.7 percent in 2012 and 1.2 percent in 2013 for Spain.

On Tuesday, the Spanish police clashed with thousands of demonstrators who had gathered at the Plaza de Neptuno square near the lower house of parliament to protest against the austerity measures adopted to address the financial crisis.

The Occupy Congress demonstration drew an estimated 6,000 people from all walks of life tired of nine straight months of harsh economic austerity measures introduced by the government of Prime Minister Mariano Rajoy.

The worsening eurozone debt crisis has increased Spain’s financing costs and the country is seeking a European Union bailout similar to the one Greece received.

On June 9, eurozone finance ministers agreed to lend 100 billion euros ($125 billion) to Spain to save its teetering banks.

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