central bank : ain still mired in recession

Spain appears to be stuck in a jobs-killing recession in the final months of 2012, the central bank said in a preliminary report Wednesday. The scarce available data pointed to shrinking economic output in the final months of 2012, the Bank of Spain said. An earlier buying spree among shoppers trying to beat a September 1 sales tax rise had now evaporated, the central bank said, allowing the recession to keep its grip on Spain. "Overall information available points to output still falling in the final months of 2012," it said in a monthly report. Car sales in October had picked up from a plunge the previous month provoked by higher sales taxes, the central bank said. But while household and retail sentiment had improved a little, latest indicators "continue showing intense falls in investment in construction", it said. Last month, Spain said it had moved into a second year of recession with output shrinking 0.3 percent in the third quarter, as the unemployment rate hit 25 percent. The eurozone's fourth-largest economy has been shrinking for 15 months even as the right-leaning government imposes sweeping austerity measures in the teeth of rising street protests. Scarce jobs, sharp tax rises, and severe public spending cuts including in health care and education prompted general strikes in Portugal and Spain and stoppages in Greece and Italy on November 25. In Spain, the government is tipping an economic slump of 1.5 percent this year. Its forecast of a 0.5-percent contraction in 2013 is widely viewed as highly optimistic, however. The European Commission, for example, saying it expects Spanish output to tumble 1.4 percent.