Spain has today followed the UK back into recession. The country joined the UK in a double dip recession on the same day that the International Labour Organisation predicted bleak global unemployment.
Spain’s economic contraction was confirmed by their National Statistics Institute, its economy shrank by 0.3% during the first quarter which was less than the predicted 0.4%. The previous quarter also contracted by 3%.
Louise Cooper, market analyst at BGC Partners said: ‘Although the figure is not quite as bad as the forecast of a 0.4 per cent fall, do not get carried away with optimism – I believe that Spain is close to imploding under austerity and a property bust.’ ‘It is following Ireland but without the benefits of a reformed and pro-business economy.’
Unemployment has reached 24.4% in Spain, with over half of under 25’s out of work which is the highest number in nearly 20 years. Because of a downgrade on Spanish government debt eleven Spanish banks have had their ratings cut by Standard & Poor, the ratings agency. The move is because the banks own a lot of Spain’s debt which is now a riskier prospect.