Spanish economy accelerates shrinkage

Last trimester was the worst for the Spanish economy. According to Instituto Nacional de Estadística (INE) previsions, Spain’s Gross Domestic Product (GDP) shrank 1.4% in 2012. It means that the economy has been worsening since 2011. But not only Spain is getting worse, the entire European Union (EU) has been contracting since 2011 last trimester.

Spain, the Euro countries (UEM-17) and the entire EU (UE-27) are falling down again.

The main point that explains the Spanish economic decline is that salaries fell around 8.5%. It caused a great drop in the national consumption. To add insult to injury, prices went on rising over 2.7% a year. People don’t have enough money to buy things; articles are more expensive; they stop buying.

This awful situation explains that there isn’t any economic sector healthy. Even computer and communications (the only clearly hiring sector last year) made lots of people redundant. Spanish Government calculates that near 800,000 people was laid off last year.

It seems that problems in Spanish economy will be here for a long term, especially now with the central and northern Europe also shrinking. The EU should think if the austerity policy is working or not. The results say it doesn’t.

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