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Spain's central bank confirms recession

Spain's central bank confirms recession
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Spain’s central bank has said it believes the country’s economy contracted by 0.4 percent in the first quarter of this year compared to the previous quarter.

That is the first clear official confirmation of the scale of recession.

The Bank of Spain’s figures tend to give an accurate reflection of official government data due later.

It said weak domestic demand has dragged the economy into its second formal recession – two consecutive quarters of negative quarterly growth – since 2008.

“The Spanish economy began 2012 in relapse, in which very weak domestic demand side was only offset by relative strength in the external sector,” the bank said.

“The evolution of the economy in the next few quarters is subject to uncertainty and downside risks related to the potential effects of the sovereign debt crisis.”

The central bank said output fell by 0.5 percent on an annual basis January to March, after growing by 0.3 percent at the end of 2011. The economy shrank by 0.3 percent quarter-on-quarter in the last three months of 2011.