Spain Emerges From Recession as Contagion Threatens

Spain’s economy emerged from an almost two-year recession in the first quarter, trailing the euro area by six months as contagion from Greece’s fiscal crisis threatens to undermine the recovery.

Gross domestic product expanded 0.1 percent in the first three months of 2010, the Madrid-based Bank of Spain estimated in its monthly report today. GDP contracted 1.3 percent from a year earlier.

Spain’s once-booming economy started contracting in the second quarter of 2008 and has taken six months longer than the euro area as a whole to return to growth as households pay down debt and suffer the region’s highest jobless rate. Contagion from the Greek crisis, which pushed Spain’s risk premium to a 14-year high today, may undermine the recovery as Prime Minister Jose Luis Rodriguez Zapatero struggles to convince investors he can control one of Europe’s biggest deficits.

Read Full Article from BusinessWeek

- Posted: 2010-05-07 10:31:30

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