Bank of Spain sees deep recession in 2013
2013-03-26 17:01:58
The Spanish economy is set to sink deeper into recession this year and unemployment is likely to see a fresh record as austerity measures to curb budget deficit dims scope of recovery, a report from the country's central bank showed Tuesday.
Gross domestic product will shrink 1.5 percent this year, following a 1.4 percent fall in 2012, the Bank of Spain in its annual forecast on Tuesday. The economy is likely to recover next year, with GDP forecast to grow 0.6 percent, it said.
The unemployment rate is projected to rise to 27.1 percent of the labor force, before easing over the course of 2014 to 26.8 percent. Both rates are above last year's 26 percent.
The central bank observed that the budget deficit at the end of 2012 came in at 6.7 percent of GDP, which was 0.4 percentage point above the target. The deficit is forecast to shrink to 6 percent in 2013.