Recession began earlier than first estimated by statistics office
Government rules out recovery in economy before next year
Spain's second recession in three years kicked in earlier than had been previously estimated, according to revised figures released Tuesday by the National Statistics Institute (INE).
The INE said GDP shrank slightly in the third quarter of last year, when it previously estimated output was flat. The institute on Monday had revised downward its growth figures for 2011 and 2010.
"As a result of this update as regards 2011, the first quarter in which there was negative quarterly growth, although very small, was the third not the fourth," the INE said in a statement.
Output has now contracted for four quarters in a row.
The INE confirmed an earlier flash estimate that the economy contracted by 0.4 percent on a quarterly basis as consumer spending slumped 1.0 percent due to a quarter of the working population being out of a job.
At a news conference after the release of the figures, the secretary of state for the economy, Fernando Jiménez Latorre, said the recession was currently at its deepest point and that the downturn would continue into the second half of this year before a recovery starts to kick in at the start of 2013.
"We fear that things are likely to get worse before they get better," Bloomberg quoted Martin van Vliet, an economist at ING Bank in Amsterdam, as saying. Van Vliet predicted Spain would seek additional financial aid as early as next month. "With much more fiscal austerity in the pipeline and unemployment at astronomic highs, the risks are clearly tilted toward a more protracted recession," he said.
Latorre said that in light of the latest figures, the government does not see the need to revise its growth forecast for this year of a contraction of 1.5 percent.
Output contracted 0.5 percent in the last quarter of 2011, compared with the previous three months. The INE had earlier estimated a drop of only 0.3 percent.
The fall in GDP in the first quarter of 2012 on an annual basis was revised to 0.6 percent from 0.4 percent. Output shrank 1.3 percent year-on-year in the second quarter, compared with an initial estimate of 1.0 percent.
Domestic demand shaved 3.9 percentage points off annual growth in the period April-June, while net trade - exports minus imports - made a positive contribution of 2.6 points.