Economy at standstill with worse data seen on the way

The Spanish economy stopped growing in the third quarter of the year, the National Statistics Institute (INE) confirmed on Friday. As the Bank of Spain had already advanced, only a significantly good performance by foreign demand prevented negative growth, which several national and international analysts feel will be a reality by year's end in any case. The nearly 22-percent jobless rate and persistent financial crisis has triggered a review of all forecasts, with the BBVA and the European Commission now estimating the fourth quarter growth figure at minus 0.1 percent.

Compared with the same period in 2010, GDP grew 0.8 percent. But growth was 0.0 percent between July and September from the second quarter of this year.

A drop in domestic demand is paralyzing growth. According to European officials, Spanish GDP will grow 0.7 percent in 2012, a third of what the government had forecast, although if the Popular Party wins the November 20 elections, it could implement new measures that would change the forecasts.