MADRID Aug 29 Spain's shrinking economy came
close to stabilising between April and June but its slump
started three months earlier than previously thought, data
showed on Thursday.
Gross domestic product contracted 0.1 percent in the first
quarter from a quarter earlier, the National Statistics
Institute (INE) said, in line with forecasts and a preliminary
Spanish exports are recovering but domestic demand has
remained weak, contributing to a slowing of consumer inflation,
which separate data showed hit a four-month low of 1.5 percent
The 0.1 percent drop in output was the smallest since the
second quarter of 2011 when the economy started to contract,
with a rise in exports not strong enough to offset weak domestic
demand and inflation easing as the recession dragged on.
INE revised its quarterly growth data back to the beginning
of 2009. The earlier figures had pegged the beginning of the
slump to the third quarter of 2011.
Spain has been in and out of recession since a decade-long
property bubble burst in 2008 and, with unemployment at around
27 percent, is expected to remain in an economic slump for at
least another year.
Although better-than-expected growth figures from its
European neighbours, including Germany, Britain and France,
which alone account for over a third of Spain's total exports,
could help it emerge from recession before the end of the year,
recovery is expected to be gradual.
"Much of what we're seeing in the first and second quarters
has been distorted by Easter falling in March this year after
April last year. We can see that Spain is slowly on the mend,
but it's going to take years and recovery will be very
sluggish," said economist at Jefferies David Owen.
On an annual basis, second quarter GDP shrank 1.6 percent
after a drop of 2 percent January to March, INE said, better
than a Reuters forecast and preliminary reading of a 1.7 percent