Spain's economy has seen a further decline in gross domestic product over the past couple of months. Budget consolidation measures did not yield the desired results, with growth incentives being insufficient.
Crisis-stricken Spain posted a 0.5-percent contraction of its economy in the first quarter of 2013, the nation's central bank announced on Tuesday.
"During the first three months of the year, the Spanish economy continued its path of contraction, but at a slower pace compared with the end of last year", Banco d' Espana said in a statement. In the final quarter of 2012, the economy shrank by 0.8 percent quarter-on-quarter.
Spanish Economics Minister Luis de Guindos said the government expected gross domestic product of the eurozone's fourth-largest economy to decline by 1 to 1.5 percent throughout this year, after contracting by 1.37 percent in 2012.
Doubts about harsh savings policy
Markit Chief Economist Chris Williamson said he saw cooling inflationary pressures throughout the 17-member euro area.
"But the renewed decline in Germany will also raise fears that the region's largest growth engine has moved into reverse, thereby acting as a drag on the region as particularly steep downturns exist in France, Italy and Spain.
The Spanish newspaper "El Pais" said in its Tuesday edition it welcomed the current European debate about an easing of austerity measures.
"The drastic budget cuts in Spain have failed in every respect," the daily commented. "Deficit targets have not been met, the debt load has not become smaller as there has been a lack of incentives to kick-start growth in the country."
hg/ipj (AFP, dpa)