Spanish Recession Probably Deepened in Second Quarter

En la calle Génova, Madrid, la noche del 9 de marzo. (Photo credit: Wikipedia)

Spain's recession deepened in the three months through June as the toughest budget cuts in the country's democratic history pushed the economy into a third consecutive quarter of contraction, the Bank of Spain said. The euro area’s fourth-largest economy shrank 0.4 percent from the first quarter, when gross domestic product fell 0.3 percent, the central bank said in an estimate in its monthly

bulletin released in Madrid today. Domestic demand “fell more sharply than in the prior quarter,” while exports showed a “moderate recovery,” it said. Prime Minister Mariano Rajoy last week announced his fourth round of tax increases and spending cuts since Dec. 30 as he struggles to convince investors that the nation won’t need a second bailout. The planned budget cuts through 2014 now amount to more than 10 percent of annual GDP. Spain’s 10-year note yields surged above 7.5 percent today, breaching a level that forced Ireland, Portugal and Greece to seek external aid. ... Continue to read.