Eurozone Crisis: Spain's GDP Shrinks By 0.3%
Spain's economy has continued to shrink, according to official figures, as the government's harsh austerity measures take their toll.
The country's GDP contracted by 0.3% between July and September, slightly better than the 0.4% drop of the previous quarter, the country's National Statistics Institute said.
It marks the fifth straight quarter of contraction and follows a fall in domestic demand.
But on an annual basis, the economy shrank by 1.6% - the sharpest annual decline since the end of 2009.
The eurozone's fourth largest economy has been badly hit by the region's ongoing debt crisis, and saw its 10-year bond yields hit unsustainable highs in the summer.
These costs have since eased but the latest economic data is likely to put more pressure on Prime Minister Mariano Rajoy.
He has so far resisted requesting a sovereign bailout - which would be accompanied by strict economic conditions and international supervision - by announcing his own drastic cuts.
The government has outlined spending cuts and tax hikes worth over 60bn euros (£48.3bn) to the end of 2014, in an attempt to cut the budget deficit in line with EU guidelines.
The measures include a VAT hike, introduced at the beginning of September, which pushed up consumer prices and hit retail sales, which fell at the sharpest pace on record in response.
Spain, which has a 25% unemployment rate, has already secured a rescue loan of up to 100bn†euros (£80.6bn) for its banks.