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Spain's economy shrinks towards recession


Spain's economy shrinks towards recession


Spain looks set to be the next European country to slide into recession. The economy contracted 0.2 percent between July and September from the previous quarter, according to an estimate from Spain’s central bank. It is the country’s first quarterly decline since 1993.

The Madrid government blamed external factors. Deputy Prime Minister Teresa Fernández de la Vega said: “These are difficult times. We’re going through an economic situation, as everyone knows, which is due to the international crisis and is affecting all countries, we’re no exception.”

But Spain’s economy was already under strain from the collapse of a decade-long building boom which has led to a surge in unemployment.

The September figures from the European statistics office show the jobless rate in Spain was the highest in the region at 11.9 percent of the working population. Slovakia was the next worse at 10 percent.

The average in the 27 EU members is seven percent. Denmark and the Netherlands have the lowest unemployment rates. For the 15 countries in the euro zone, the rate was 7.5 percent, stable compared with August.

But economists are pessimistic about the future. An example from Spain is the town of Novelda, which sells its highly prized marble around the world.

There has been no unemployment there for half a century, but now foreign and domestic demand has slumped and 1,500 quarry and support workers have lost their jobs in the past year.

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