Spain’s economy contracts at slower pace in third quarter

MADRID - Spain’s Gross Domestic Product contracted at a slower pace in the third quarter, declining 0.3 percent relative to the previous three-month period and four percent year-on-year, according to final figures from the National Statistics Institute, or INE.

By comparison, the economy shrank 1.1 percent in the April-June period compared with the first three months of the year and 4.2 percent annually in the second quarter.

Declining domestic demand once again weighed on the economy, although that indicator was down 6.5 percent as opposed to 7.4 percent in the second quarter due to “a less negative perception of the economy by families”.

This resulted in a 5.1 percent inter-annual drop in household spending, compared with a six percent decline in the second quarter.

Meanwhile, investment dropped 16.2 percent, although that decline also was less than in the second quarter.

Though imports and exports both fell sharply year-on-year, the latter rose in the third quarter relative to the previous three-month period.

The final INE figures were in line with the institute’s preliminary data released last week.

Spain, which officially entered into recession in the last quarter of 2008, has been battered by the global financial crisis and the end of a construction-industry-led boom, and its unemployment rate of roughly 18 percent currently stands at twice the average for the euro zone.

–EFE