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(RTTNews) - The Spanish economy contracted for the first time in fifteen years amid the global financial crisis and the end of a housing boom as well as a slowdown in the construction sector.

Friday, flash estimates released by the National Statistics Institute showed that the Spanish economy shrunk 0.2% in the third quarter, worse than the 0.1% contraction forecast by economists. This was the first contraction since 1993. In the second quarter, the economy had expanded 0.1%.

Year-on-year, the gross domestic product increased 0.9% in the third quarter, sharply slowing from 1.8% growth logged in the second quarter. The yearly growth was in line with expectations, but slowed for the sixth quarter in a row.

Most analysts believe the Spanish economy has entered recession and the latest data strengthens the view. Some expect the recession to last two or three quarters. Industrial production and service sector output has been falling in recent months.

Adding to the economic woes, unemployment is on the rise. The unemployment rate in Spain increased to 11.33% in the third quarter from 10.44% in the second quarter.

Confirming the first recession in the 15-nation economy since the adoption of Euro, data released on Friday showed that Eurozone's gross domestic product contracted 0.2% sequentially in the third as well as the second quarters of 2008.


Source :
1. Spanish Economy Contracts For First Time Since 1993, 11/14/2008 8:48 AM ET.