Spain faces prolonged depression

Spain's crisis-hit economy won't recover any time soon, the country's central bank has found, as it predicts another year of steep economic decline. The country's record unemployment is also set to continue rising. The eurozone's fourth biggest economy, Spain, was set to contract by 1.5 percent this year, the Bank of Spain predicted Tuesday. It is a faster pace of economic decline than in 2012, when the country's gross domestic product shrank by 1.4 percent. Spain's central bank said a modest rebound was possible in 2014 at the earliest, forecasting a slight output expansion of 0.6 percent for that year. The Spanish economy was in a complicated situation because of the need to further cut public expenditures as a result of its debt crisis, the central bank said in a report. Spain's public finances are in disarray as the government is seeking to prevent the collapse of the country's banking sector in the wake of a huge mortgage crisis. Spain's budget deficit stood at 6.7 percent in 2012 and, according to the Bank of Spain, was expected to come in at 6 percent this year and 5.9 percent in 2014.