Spain's Economy Contracts Third Quarter in a Row

Associated Press/ABC News ^ | 30 July 2012 | CIARAN GILES

[moonshot925]

The Spanish economy remains stuck in its second recession in three years after contracting 0.4 percent in the second quarter of 2012 from the previous three months, according to official data.

It was the third consecutive contraction following the previous two 0.3 percent quarterly declines, Spain's National Statistics Institute said Monday.

The institute said that compared to the second quarter in 2011, the economy had contracted 1 percent. A technical recession is commonly defined as two consecutive quarters of economic contraction. The slump was due to a fall in demand at home, offset slightly by an increase in exports, the institute added.

The conservative government predicts the economy will contract 1.5 percent for all of this year and 0.5 percent next year.

Spain has near 25 percent unemployment and is struggling to avoid having to seek a financial bailout, as Greece, Ireland and Portugal have already done.

Spain has asked for as much as €100 billion ($123 billion) in loans for its banks, which are laden with soured investments following a property sector collapse in 2008. A sovereign bailout for Spain, which has a €1.1 trillion economy, would be far larger.

[skeeter]

Isn’t that the official definition of a depression?

[allendale]

There are consequences for squandering capital to maintain a faux lifestyle with three generations of deficit spending. When the debts become non sustainable all the left wing financial gurus with all the sill financial gimmicks in the world cannot create wealth. The consequence is misery, poverty, and a decline of Western civilization. Things will get ugly.

[moonshot925]

Yes, Spain’s industrial output and GDP are steadily declining while unemployment is at 25% and public debt is increasing rapidly.

It is a depression.