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Spain to sink further, warns central bank Spain to sink further, warns central bank
(10 days later)
Spain's economy will sink deeper into recession this year, the Bank of Spain has predicted, sending a stark message to the Spanish government as it prepares to revise its own growth forecast. In its annual update of economic forecasts, the central bank said it saw the economy shrinking by 1.5% in 2013 following a 1.4% contraction last year as austerity measures continue to exacerbate the effects of a burst property bubble.Spain's economy will sink deeper into recession this year, the Bank of Spain has predicted, sending a stark message to the Spanish government as it prepares to revise its own growth forecast. In its annual update of economic forecasts, the central bank said it saw the economy shrinking by 1.5% in 2013 following a 1.4% contraction last year as austerity measures continue to exacerbate the effects of a burst property bubble.
The bank's estimate is well below the official forecast for a 0.5% contraction in GDP, although the government is widely expected to revise the 2013 figure downwards in April. The prediction is broadly in line with consensus, with most economists expecting the economy to struggle to return to growth this year on the back of dire domestic demand and a weakening external sector.The bank's estimate is well below the official forecast for a 0.5% contraction in GDP, although the government is widely expected to revise the 2013 figure downwards in April. The prediction is broadly in line with consensus, with most economists expecting the economy to struggle to return to growth this year on the back of dire domestic demand and a weakening external sector.
The eurozone's fourth largest economy sank into its second recession since 2009 at the end of 2011, as the fallout from a property bust five years ago continued to weigh on every aspect of economic activity, from its beleaguered banks to high street sales. Unemployment is likely to hit another record high of 27.1% in the course of the year, the central bank said, up from a current 26%, one of the highest rates in the eurozone.The eurozone's fourth largest economy sank into its second recession since 2009 at the end of 2011, as the fallout from a property bust five years ago continued to weigh on every aspect of economic activity, from its beleaguered banks to high street sales. Unemployment is likely to hit another record high of 27.1% in the course of the year, the central bank said, up from a current 26%, one of the highest rates in the eurozone.
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