Spanish Recession Worsened In Q2, Bank Of Spain Says

Spanish Recession Worsened In Q2, Bank Of Spain Says


The Spanish economy sunk deeper into recession in the second quarter, the Bank of Spain said, while bailout concerns pushed the country's borrowing costs to euro-era highs.
In its quarterly estimates released on Monday, the Bank of Spain said the economy would have contracted 0.4 percent sequentially in the second quarter.
This was sharper than the 0.3 percent contraction reported in the first quarter of 2012 as well as in the final three months of 2011.
Spain's borrowing costs continued to remain above the danger threshold of 7 percent despite the Eurogroup's approval of the EUR 100 billion bailout for its banks Friday.
Adding to Spain's woes, the 10-year yield climbed to a euro-era high of around 7.57 percent on Monday after media reports said Murcia could emerge the second Spanish region to seek government aid after Valencia.
Speculation is rife in the Spanish media that six regions out of the 17 are likely to seek financial assistance from the government.
Thus far, Spain has sought aid only to prop up its troubled banking system. The latest string of negative news has fueled concerns that the country may be forced to seek an international bailout for its entire economy.
Demand declined 1.2 percent quarter-on-quarter during the period against 0.5 percent fall in the previous three months. This was due to a sharper fall in household spending and general government demand.
Net external demand continued to soften the adverse impact of the decline in national demand, adding 0.8 percentage points to GDP due to a moderate pick-up in exports.
In year-on-year terms, the gross domestic product declined 1 percent following 0.4 percent fall in the first quarter.
"Various differing factors have contributed to compounding the sovereign debt crisis, including the doubts over the Spanish economy, and in particular over the recapitalisation needs for its financial system and its ability to see through the fiscal consolidation process along the lines agreed at the European level," the central bank said in the report.
Last week, the Spanish government cut its economic forecast and sees the recession extending into next year. The government now expects the economy to shrink 0.5 percent in 2013, in contrast to its earlier forecast for growth of 0.2 percent.
The International Monetary Fund has slashed Spain's economic outlook for next year and now sees a 0.6 percent contraction versus the 0.1 percent growth expected in April. The economy is forecast to contract 1.5 percent this year compared to the 1.9 percent contraction expected earlier.
On the employment situation, the Bank of Spain said employment fell sharply once more in the second quarter, more significantly in construction. Spain has the highest unemployment rate in Eurozone.
According to figures on social security registrations, the process of job destruction was halted in June in seasonally adjusted terms. But the bank felt the figures for this month are possibly distorted to some extent by factors such as the regularisation of household employees.
Prime Minister Mariano Rajoy unveiled a EUR 65 billion austerity package on July 11 that requires further tax hikes and spending cuts.
The Bank of Spain warned that the slippage detected in revenue in recent months has signalled the risk of the budget deficit once again exceeding this year the target set.
"Foreseeably, the recently approved budgetary measures should allow the fiscal consolidation path to be redressed to meet the new targets," the bank added.


More FOREX-news on pages InstaForex.Com




Bank debit card of InstaForex




InstaForex international broker offers all its customers to take advantage of a prepaid debit InstaForex MasterCard . The card is issued by the foreign bank the standards of which are anonymity and confidentiality. Whatever the turnover, you data will never be provided to the regulated authorities of any country or third parties. InstaForex MasterCard is a universal mean of money deposit to and withdrawal from the InstaForex trading accounts.

With the help of InstaForex MasterCard you can withdraw funds from the InstaForex trading account directly to the debit card within 24 hours. Moreover, this card gives you an opportunity to replenish your trading account without commissions.

Therefore, InstaForex MasterCard establishes the direct link between the InstaForex trading account and cash money. Forex accounts have never been as easy to use as now with InstaForex.

You can order the InstaForex MasterCard through InstaForex Client Cabinet.
You can use one card for several trading accounts opened in your name.

Note: Withdrawal of funds to InstaForex MasterCard without restrictions and additional commissions is only possible if the account is actively traded on. Otherwise, a commission of 2-5% may be charged for each withdrawal.

Draw up your InstaForex MasterCard from InstaForex right now!

InstaForex MasterCard is useful because:



it allows withdrawing money from several trading accounts opened in the card holder's name;
it allows replenishing a trading account without commission;
you can check its balance in the Internet and top it up on the Payoneer website;
you can use it in over 200 countries all over the world;
it performs all MasterCard functions enabling you to pay for goods and services online;
it has unlimited total allowed balance and daily withdrawal and online payment limit of $ 5,000 dollars;
you pay only $1 maintenance fee per month and $3 dollars commission for cashing in ATM;
the Choice Bank emitting the card guarantees anonymity and confidentiality of the information;
you can order it in Client Cabinet on the official InstaForex website.