The Bank of Spain has confirmed today that the Spanish economy entered recession in the first quarter, with a further drop in its GDP, while it has indicated that job destruction has escalated to March.
Private consumption and indicators that measure the confidence of consumers and retailers in January and February fell to 2010 levels.
The watchdog does not advance specific information in this bulletin, but the trend confirms “the dynamic extension of the contraction” in gross domestic product in the first quarter, which binds to the fall of 0.3 in the fourth quarter of 2011.
In the next economic bulletin, the Bank of Spain will provide the data fall of the Spanish economy, while the INE will advance on April 30.
This latest report marks the fall of 3.9% in February registrations of private cars on year and decreased 4.7% in January retail sales at retail.
Stresses the extension of the sluggish demand amid falling investment in capital goods and the decreasing number of members of Social Security in the construction sector.
To this sum the slowdown in export growth, which, according to Customs data, was 5.4% lower than the increase recorded during the fourth quarter of 2011.
The tourism sector is the only thing keeping the “tone of strength” to increase the number of overnight stays of foreigners and total expenditures of these tourists.
In the labor market, job losses has intensified in the early months of the year and the number of members fell again in February, while the annual rate of advance of the number of unemployed accelerated.
The Bank of Spain also indicates the deviation of public deficit in 2011 the target set by the previous government and highlights the new non-financial expenditure ceiling set for 2012 by the new government and the deficit target of 5.3% of GDP expected this year.
In this sense, values the “different mechanisms” to the autonomous regions and municipalities in order to facilitate the refinancing of prior debts or payments to commercial creditors.
Around the euro area, the economic bulletin noted “signs of stabilization” of economic activity in the first months of the year, but warns that “even at low levels,” and that industrial production rose in January, but the orders fell.
The retail sales in January rose slightly in the euro area, but the car registrations that month showed a sharp decline.
The governing body remembers Miguel Angel Fernandez Ordonez member states of the euro area should “Indentify” now in its plans to reform and stability specific measures they intend to take to promote growth and make it compatible with fiscal consolidation.
Meanwhile, the finance minister, Cristobal Montoro, acknowledged, after hearing this report, that Spain is going through a “very difficult” and you have to take exceptional measures, “with effort and sacrifice,” but has stated that not fall on the weakest sectors of society.
In his view, the goal is to overcome this period of recession, which has a key at the lack of bank credit, so “urgent” bank restructuring, and the stability of public budgets.