Spain economy shrinks 0.3%

The struggling Spanish economy shrank 0.3 per cent in the fourth quarter of 2011, stoking concerns that a weak first quarter this year will see it back in recession, official data showed yesterday.

For 2011 as a whole, the economy expanded a meagre 0.7 per cent, according to the figures which confirm initial estimates given January 30.

The slump, in a country where unemployment runs at nearly 23 per cent, reflected a continued slowdown in domestic demand which could not be offset by exports, the INE statistics office said.

The 0.3 per cent fall in output compared with the third quarter was the same as reported for the wider eurozone on Wednesday but the bloc managed overall 2011 growth of 1.5 per cent, compared with Spain’s 0.7 per cent.