Spain confirms booking for return ticket to recession

The National Statistics Institute (INE) on Thursday confirmed the economy shrank again at the end of last year as consumer spending fell due to high unemployment, while government outlays decreased as a result of its austerity.

The export sector, which had been the only bright spot in the scenario, also suffered a setback.

The INE said GDP was down 0.3 percent in the fourth quarter from the previous three months, but up 0.3 percent from the same period a year earlier. For the whole of last year, output was up 0.7 percent.

Consumer spending declined an annual 1.1 percent, while government spending dropped 3.6 percent. Exports of goods and services were up 5.2 percent on annual basis but decreased 1.6 percent from the previous three months.

“The fall highlights the fact that there has been no recovery in the economy at any points since the start of the crisis,” Economy Minister Luis de Guindos said in response to the figures.

Guindos warned there was worse to come, pointed to the Bank of Spain’s forecast of a contraction of 1.5 percent in output this year. “This without doubt will be reflected in Spain’s labor market indicators,” he added. The jobless rate in Spain hit 22.85 percent at the end of last year, with a record 5.3 million people out of work, as employment declined 3.3 percent.