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Spain slides back into recession

business Updated: Apr 24, 2012 02:09 IST

Spain's jobs-scarce economy plunged back into recession in the first quarter of 2012 as employment slumped even further, the Bank of Spain said on Monday.

Barely two years after emerging from the last downturn, Spain slid into recession again with two consecutive quarters of economic contraction, the central bank said in a report.

Gross domestic product fell by an estimated 0.4% in the first quarter of 2012 after a 0.3% decline in the last three months of 2011, the bank said.

Spain, whose unemployment rate at the end of 2011 was already the highest in the industrialised world at 22.9% overall and nearly 50% for the young, suffered a further sharp jobs decline.

"Employment fell again, sharply, with an estimated year-on-year decline of 4.0%," the report said, noting also a "significant" decline in unit labour costs.

The government forecasts the jobless rate will rise to 24.3% this year as the sagging economy struggles to absorb millions of jobs destroyed in the collapse of a property boom in 2008.