Spanish growth at slowest pace for 13 years

Spain’s economy expanded at the slowest pace in almost 13 years in the first quarter as the global credit squeeze exacerbated the country’s housing slump.

The National Statistics Institute revealed today that the Spanish economy grew 0.3 percent from the previous three months which is confirmation of the poor preliminary estimate issued last week.

Following the global credit squeeze, the much publicised housing slump and deterioration of the construction industry, the economy is now expanding at its slowest pace since 1995, at a rate of less than half of the rest of the euro zone which is at 0.7 percent, namely thanks to the strength of Germany and France.

A survey conducted by Bloomberg reveals that the country faces a 30 percent chance of slipping into a recession in over the next couple of years.

The sharp drop in consumer demand and the recession of the construction industry has reduced the GDP down to 2.7%, causing the economy to be set back around five years.

The Spanish government has been bullish in their response as Deputy Finance Minister, David Vegara, that despite the magnitude of the first quarter slowdown in GDP, the available data don’t point to a recession, that is two consecutive quarters of negative quarterly growth.

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