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Bank of Spain confirms recession

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Bank of Spain confirms recession

Bank of Spain confirms recession
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Spain has officially entered its first recession in 15 years.

The central bank in Madrid confirmed that the economic contraction in the third quarter continued into the final three months of the year. The Bank of Spain said domestic demand remains weak and a drop in investment in capital goods would probably intensify in the fourth quarter. The International Monetary Fund’s latest prediction it that for all of 2008 the Spanish economy will have grown by just 1.4 percent and it will fall 0.7 percent in 2009. New figures showed property prices in Spain were down 8.6 percent on a year ago and the central bank said construction investment fell further in the fourth quarter. After a decade-long boom the sector has been hit by oversupply and a lack of access to credit. Of the 171,000 people who lost their jobs in November, more than 40,000 were from the building trade. Last month the total number of registered jobless was just under three million giving Spain the European Union’s highest jobless rate. And the Bank of Spain said the latest labour market data pointed to “an intensification of the deterioration seen over the last few months.”