Spain's unemployment-scarred economy has skidded back into recession, a Bank of Spain report said Tuesday, days before a general strike and a biting austerity budget. The report confirmed widespread forecasts of a second straight quarterly slump in the first three months of 2012, sending Spain back into recession barely two years after it emerged from the last one.
"The most recent information relating to the beginning of 2012 confirms a continuation of the contraction of activity in the first quarter of this year," the bank said in its March economic bulletin. The Spanish economy, the fourth-biggest in the euro area, had already shrunk by 0.3 percent in the fourth quarter of 2011 compared to the third quarter, according to official data.
Prime Minister Mariano Rajoy's conservative government, in power since December, announces Friday a 2012 budget that assumes an economic contraction of 1.7 percent this year after 0.7-percent growth in 2011. European leaders are concerned over Spain's deficit, fearing it may become the biggest victim of a eurozone debt crisis that has already driven Greece, Ireland and Portugal to accept international bailouts.
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