j Spanish Economy

According to forecasts compiled by the Bank of Spain and released in its economic bulletin of April, the Spanish economy has contracted by 2.9% on-year rate to 1.8% in the quarterly. This would then be the biggest decline since the early history of the 70s.
The Bank of Spain attributed this drop in GDP in the first quarter to break a world level, the tensions in financial markets and international trade.

Compared with the year 2008, we see a slowdown in final consumption expenditure of households. Are recorded declines in purchases of consumer goods in the index of retail consumption and registrations of motor vehicles fell by 38% as opposed to 45% of 2008 happened.

The deteriorating labor market and falling employment have affected households, although there was a decrease in the interest rate and inflation. Similarly, the declining price of housing as the tightening of financing conditions contributed to the cost savings of families.

In regard to construction, the Bank of Spain considers that the adjustment of the current investment would be the result of sustained decline in the number of dwellings started during 2008 and early 2009.

According to the entity governed by Fernández Ordoñez, adjustments in consumer prices in the country are far more intense than in the rest of the euro area and this situation conducive to Spain which makes the inflation differential.