The Government has confirmed that Spain is now officially in recession.
The Spanish economy entered recession during the final quarter of 2008 as it contracted by 1.1%. The previous month had seen a decline of 0.2%. The definition of recession is generally accepted as being two consecutive months of decline in GDP.
Most of the decline in the fourth quarter was as a result of falling domestic investment consumption.
Unemployment in Spain has reached 13.91%, with 3.2 million people out of work during the last quarter of 2008. Unemployment rose by 1.28 million during 2008 with a staggering increase in the number of households where all of its members were out of work. There are now 827,000 hoseholds where no-one has a job, an increase of 87%.
Current estimates show that unemployment is expected to rise to 15.9% during 2009, with the GDP shrinking by 1.6%.
However, Government officials are predicting a ‘vigorous’ expansion of the economy in 2011 and a drop in unemployment to just under 15%.