Spain to slide back into recession in 2012

MADRID, Spain — Spain will slide back into recession early next year with the current quarter and the first of 2012 both registering negative growth, new Economy Minister Luis de Guindos said Monday.

MADRID, Spain — Spain will slide back into recession early next year with the current quarter and the first of 2012 both registering negative growth, new Economy Minister Luis de Guindos said Monday.

De Guindos said he expects the economy — the eurozone’s fourth largest — to contract by between 0.2 per cent and 0.3 per cent on the previous quarter in the final three months of this year and again in the first quarter of next year. He said the outlook for next year was poor.

If the Spanish economy were to contract by between 0.2 per cent and 0.3 per cent for an entire year, it would shrink roughly 1 per cent.

“Let nobody be fooled, the next two quarters are not going to be easy either in terms of growth or employment,” de Guindos said.

Spain began to emerge from a near two-year recession last year. It had two successive quarters of growth in 2011 before posting zero growth in the third period.

De Guindos took office last week as part of the new conservative Popular Party government. He said then he was confident the country would emerge from its severe economic crisis and return to prosperity and its former status as a job creator.

Spain has the highest unemployment rate of the 17 countries that use the euro, with 21.5 per cent joblessness, and is running a swollen budget deficit following the recession that started with the collapse of a real estate bubble.

The Popular Party won a landslide victory in Nov. 20 elections on a promise to get the economy moving again.

Prime Minister Mariano Rajoy has pledged austerity cuts totalling C16.5 billion ($21.6 billion) and promised labour reforms.

His government is to begin approving urgent measures Friday, including a freeze on filling new civil service vacancies. except in key areas such as the security forces.

Spain has already made sharp cuts to its national spending and introduced several reforms under the former Socialist government, but the economy has failed to respond.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The interchange at Highway 2 and McKenzie Road at the south end of Gasoline Alley is being redesigned with two roundabouts. Construction is expected to begin this month and finish in October. (Graphic from Red Deer County)
Roudabouts coming to McKenzie Road overpass at Gasoline Alley

Project expected to improve traffic flow at busy intersections

A federal strategy to preserve threatened trout could conflict with provincial coal leases in the Eastern Slopes of the Rockies. (Contributed photo by Jeff Lund).
Federal regulations could save Alberta’s bull trout by shutting down mining plans, says biologist

Ottawa’s new strategy identifies a 30-metre protected area along rivers and streams

(Contributed image)
Wolf Creek Public Schools will not participate in curriculum pilot

Central Alberta school jurisdiction joins others across Alberta

Canada's Sarah Pavan and Melissa Humana-Paredes, fom left, celebrate after winning women's gold medal match against Brazil's team at the Beach Volley Worldtour Major Series, in Vienna, Austria on August 4, 2019. THE CANADIAN PRESS/AP, Ronald Zak
Canada’s world champion beach volleyball duo finally getting games before Tokyo

Canada’s world champion beach volleyball duo finally getting games before Tokyo

Toronto Raptors center Khem Birch (24) gets fouled by Atlanta Hawks guard Bogdan Bogdanovic (13) during the first half of an NBA basketball game Tuesday, April 13, 2021, in Tampa, Fla. (AP Photo/Chris O'Meara)
Bogdanovic, Capela lead Hawks past Raptors 107-103

Bogdanovic, Capela lead Hawks past Raptors 107-103

Toronto Blue Jays starting pitcher Hyun Jin Ryu throws to a New York Yankees batter during the first inning of a baseball game Tuesday, April 13, 2021, in Dunedin, Fla. (AP Photo/Mike Carlson)
Ryu sharp into 7th, Semien homers as Blue Jays top Yanks 7-3

Ryu sharp into 7th, Semien homers as Blue Jays top Yanks 7-3

Calgary Flames' Johnny Gaudreau (13) scores the game winning goal on Toronto Maple Leafs goaltender David Rittich (33) in overtime NHL action in Toronto on Tuesday, April 13, 2021.THE CANADIAN PRESS/Frank Gunn
Gaudreau scores in overtime, Flames beat Maple Leafs 3-2

Gaudreau scores in overtime, Flames beat Maple Leafs 3-2

Jim Bullock, Vicki Pappas and Randy Waples off to Canadian Horse Racing Hall of Fame

Jim Bullock, Vicki Pappas and Randy Waples off to Canadian Horse Racing Hall of Fame

Canada's Evelyne Viens celebrates scoring against Wales during the women's international friendly soccer match at Leckwith Stadium, Wales, Friday April 9, 2021. THE CANADIAN PRESS/Nick Potts/PA via AP
Canada capitalizes on England mistakes to win women’s soccer friendly 2-0

Canada capitalizes on England mistakes to win women’s soccer friendly 2-0

After weekend hiccup at men’s worlds, Grand Slams move into curling bubble

After weekend hiccup at men’s worlds, Grand Slams move into curling bubble

Erickson Gallardo of Canada's Toronto FC and his teammates celebrate after Andres Mosquera of Mexico's Leon scored an own goal during their Concacaf Champions League soccer match in Leon, Mexico, Wednesday, April 7, 2021. THE CANADIAN PRES/AP/Mario Armas
Toronto FC gets vaccine boost but injury list still an issue ahead of Leon rematch

Toronto FC gets vaccine boost but injury list still an issue ahead of Leon rematch

Most Read