Spain decides whether to give Zapatero second term

By Ben Harding

MADRID (Reuters) - Spain votes on Sunday in an election likely to return the ruling Socialists to power, though again short of an absolute majority, after an ill-tempered campaign focused on a weakening economy.

Four years ago, then opposition leader Jose Luis Rodriguez Zapatero came from behind to win power on a wave of voter anger at the ruling Popular Party, who tried to blame the ETA Basque separatists for election-eve bomb attacks by Islamic militants.

The killing of a former Socialist councilor in the Basque Country on Friday, which all major parties blamed on ETA, has again cast a pall over a Spanish election.

But political commentators say this time around, the attack is unlikely to radically change the outcome after a campaign dominated by worries over soaring immigration and the end of an economic boom.

Economists say growth could fall as low as 2.0 percent this year -- a rate not seen since the early 1990s -- from over 4 percent a year ago as a global credit squeeze chokes Spain's already-cooling property sector.

The sector accounts for almost a fifth of Spain's GDP and jobs. Unemployment, which hit a 29-year low last year, is up by almost 300,000 since June to 2.3 million.

Highly indebted Spaniards, already struggling to meet higher mortgage repayments, are suffering from racing food and fuel prices that pushed inflation to a record 4.4 percent in February.

Many are also unsettled by an unprecedented influx of more than 3 million registered immigrants in the last eight years -- most of them from Morocco, Eastern Europe and Latin America.