The recession in the Eurozone’s fourth largest economy has worsened by more than previously estimated after Spain’s GDP contracted by 0.8% in the fourth quarter of 2012, its seventh straight quarterly contraction.
Spanish output fell by 4.7%, a figure far worse than had been predicted due to a decline in domestic demand whilst exports managed to improve by 2.8% over the same period. The figures were released by Spain’s National Statistics institute. Economists had been expecting a decline of 0.7%.
“The key numbers are consistent with very weak survey data,” Guillaume Menuet, senior economist at Citigroup, told Bloomberg. “It is about time the real economy numbers match the challenged picture which has become the mark of many countries across Europe including Spain in the last three to six months as across-the-board as austerity damages growth.”
The Euro currency was also dragged downwards after the Netherlands revealed that its budget deficit will breach the European Union’s limit this year and in 2014.
“The Dutch budget-deficit target forecasts look to be above the 3 percent EU target for this year and next and there are downgrade risks for the Netherlands around that,” said Melinda Burgess, a currency strategist at Royal Bank of Scotland Group Plc. “This adds further weight to our view that we should see further downside for the euro from here. Fiscal and growth worries in the region could really come to the fore.”
Elsewhere the German jobless rate came in at 6.9% during February, matching January’s number albeit short of expectations at 6.8%. In addition, the unemployment change fell by 3000, missing estimates at -5000 and previous at -14000.
Inflation figures in the bloc and Germany are due next, ahead of the US GDP during the fourth quarter.
As of 11:35 am
The Euro to Pound Sterling exchange rate is currently trading in the region of 0.8650
The Euro to US Dollar exchange rate is currently trading in the region of 1.3117
The Euro to Australian Dollar exchange rate is currently trading in the region of 1.2773
The Euro to New Zealand Dollar exchange rate is currently trading in the region of 1.5781
The Euro to Canadian Dollar exchange rate is currently trading in the region of 1.3414
The Euro to Emirati Dirham exchange rate is currently trading in the region of 4.8172
The Euro to Swiss Franc is currently trading in the region of 1.2204
The Euro to Japanese Yen exchange rate is currently trading in the region of 120.7913