With this, the statisticians confirmed an initial estimate by the spanish central bank. Spain’s GDP had already contracted by 0.3 percent in each of the previous two quarters.
The worsening of the crisis is even more evident in a year-on-year comparison: economic output fell by 1.0 percent in the second quarter, compared with minus 0.4 percent in the first quarter.
Spain’s economy is being hit hard by the government’s drastic restructuring course – with savings and tax increases. Unemployment in spain is at its highest level in decades at almost 25 percent.
The international monetary fund (IMF) expects the eurozone’s fourth-largest economy to shrink by a total of 1.7 percent this year and not to return to growth until 2014.
According to the central bank, spain’s economy is suffering above all from a sharp drop in domestic demand: according to figures published last week, it contracted by 1.2 percent in the first quarter (previous quarter: minus 0.5 percent). It is only thanks to growing euphoric trade that this is not having a full impact on economic performance.
Spain is considered one of the euro zone’s biggest problem children. German finance minister wolfgang schauble, meanwhile, had given assurances over the weekend that the country would not need any new aid beyond the 100 billion euros promised so far to restructure the banks. "No, there is nothing to these speculations," schauble told "welt am sonntag" when asked if spain could submit a request to its partners to allow the EFSF bailout fund to buy government bonds.
The crisis in spain, which in addition to the banks also has the problem of highly indebted regions, is considered manageable by schauble. The current high interest rates are painful, "and they create a lot of anxiety, but the world won’t end if you have to pay a few percent more at some bond auctions". In the short term, the financial need is "not so rough".