Spanish GDP to contract by 1.3 or 1.4 percent in 2012: economy ministerSouce:Xinhua Publish By Thomas Whittle Updated 11/12/2012 5:52 pm in World / 2 comments
MADRID, Dec. 10 — The Spanish economy would contract by 1.3 or 1.4 percent in 2012, Spanish Minister of Economy and Competitiveness Luis de Guindos said here on Monday.
In a an interview with the Spanish National Radio, de Guindos said the economic contraction would be milder than previous forecasts which predicted that Spain’s GDP would fall by 1.5 percent, but it would all depend on the last three months of this year.
The minister said Spain would not witness any economic growth until the third or fourth quarter of 2013, although he underlined a number of positive aspects that would lead to the economic recovery such as declining family and business debts as well as an increase in exports.
He also assured Spain was on track to reduce its fiscal deficit thanks to the recent increases on sales taxes.
Asked to comment on the bond-buying program of the European Central Bank (ECB) and a possible EU bailout for Spain, De Guindos said the government “will take the best decision at the best moment,” although he also said it was very difficult to get funding given the country’s current high borrowing costs.
The Spanish risk premium, the spread between Spanish government bonds and their German equivalent, climbed up from 416 points to 437 in early trading on Monday before ending the day at 426 points.