Spain officially in recession
Spain officially entered recession in the last quarter of 2008, when its once-booming economy shrank 1.0 percent as the global financial crisis accelerated a slowdown in the property market, official data showed Wednesday.
The National Statistics Institute (INE) confirmed its own provisional figures published on February 12 that showed Europe's fifth-largest economy is in its first recession since 1993.
Gross Domestic Product shrank by 0.2 percent in the third quarter of 2008 from the second. Recession is widely defined as two quarters running of contraction of the economy.
The economy expanded by 1.2 percent during all of 2008, a sharp slowdown from the expansion of 3.7 percent in the previous year, the INE said.
Formerly one of the eurozone's chief engines of economic growth and job creation, Spain suffered an abrupt change of fortunes last year when the global financial crisis hastened a correction that was already underway in its key real estate sector, once the engine its decade-long economic boom.
The slump reflects a downturn elsewhere in the European Union.
The economy of the 15 nations that share the euro contracted by a record 1.5 percent in the final quarter of 2008, while the EU as a whole joined it in recession, the EU's statistical office said on Friday.
The INE said consumer spending plunged further, from a seasonally adjusted drop of 0.2 percent in the third quarter to a fall of 2.3 percent in the fourth.
Exports plummeted 7.9 percent in the fourth quarter on a 12-month basis, after growing 1.5 percent in the third.
Imports fell 13.2 percent in the last three months of year, compared to an drop of 2.0 percent in the previous quarter.
The Socialist government, which had long predicted a slowdown in growth but no contraction, last month slashed its forecast for the economy for this year to a decline of 1.6 percent from the previous figure of 1.0 percent growth.
It has responded with an 11-billion-euro (14-billion-dollar) infrastructure plan to create over 300,000 jobs, mainly through 31,000 public works projects across the country.
Spain's unemployment rate hit 13.9 percent in the last quarter of 2008, the highest in the 27-nation European Union, and the government expects it will rise to 15.9 percent this year before starting to gradually decline.