Spain economy stalls in third quarter

Spain's economy stalled in the third quarter of 2011 with zero growth, the central bank said on Monday, piling on bad news for the Socialist government three weeks ahead of elections. The Bank of Spain issued its report just three days after official figures showed Spain's unemployment rate soared to a 15-year high of 21.52 percent in the same quarter. According to the central bank, gross domestic product growth was "null" in the three months to September 30 when compared to the previous quarter, based on its reading of partial data for the period. Over the year, economic output in the eurozone's fourth biggest economy was up just 0.7 percent, it estimated. "As the year has progressed the Spanish economy has been showing a weakening of the faint recovery which had begun in 2010," the bank said in a report that confirmed grim forecasts it had made a month earlier. Spain's economy grew 0.4 percent in the first quarter of the year and slowed to an expansion of just 0.2 percent in the second quarter, official figures showed. Voters are widely expected to punish the governing Socialist government for its handing of the economy by delivering power to the conservative opposition Popular Party in November 20 elections. High unemployment and a series of painful spending cuts to rein in runaway government budget deficits have provoked widespread resentment and a nationwide protest movement dubbed the "indignants." Like many eurozone economies, Spain is faced with a major challenge as it attempts to trim a bloated public deficit with spending cuts while at the same time safeguarding economic growth and jobs. No-one now believes Spain can achieve the official 2011 economic growth target of 1.3 percent. Most analysts are predicting growth closer to 0.8 percent this year.