‘Spain's economy shrinks by 0.1% in Q2’

People march in a protest against budget cuts in Madrid on July 21, 2013.

Spainâ„¢s economy has shrunk by 0.1 percent in the second quarter of this year, according to preliminary data from the National Statistics Institute, making it the eight consecutive quarter of contraction.

The figure was released on Tuesday and followed a 0.5 percent dip registered in the previous quarter.

Economists warn that even though the economyâ„¢s contraction is smaller than previous quarters a sustainable growth is far away.

The countryâ„¢s central bank forecasts the economy to be flat over the next 12 months and says it remains very sensitive to adverse shocks, especially on the fiscal side.

In addition, Prime Minister Mariano Rajoyâ„¢s conservative government must lower its deficit to 4.5 percent in 2013 and 2.8 percent in 2014.

However, many economists say those targets will be difficult to meet amid poor prospects for Spainâ„¢s economic recovery.

Battered by the global financial downturn, the Spanish economy collapsed into recession after a property market crash in 2008, taking millions of jobs with it.

The Spanish government has been sharply criticized over its austerity measures that are hitting the middle and working classes the hardest.

On July 25, the statistics institute reported that the countryâ„¢s unemployment rate in the second quarter of 2013 registered at 26.3 percent.


Republished from: Press TV