Spain remains in recession

Madrid, Feb 5 (EFE).- The Spanish economy remained in recession during the last three months of 2009, with GDP falling 0.1 percent from the third quarter and 3.1 percent from the fourth quarter of 2008, the country's central bank said Friday.

Banco de España also offered a provisional estimate that Spain's gross domestic product suffered an overall decline of 3.6 percent last year, the biggest drop in decades.

Spain's economy has contracted for seven consecutive quarters.

Employment fell 6.1 percent in the fourth quarter of last year compared with the same period in 2008, the central bank said. Figures released last month showed that more than 4 million of Spain's 46.7 million people are out of work, the highest jobless total since 1996.

On the positive side, Banco de España said the 12-month fall in domestic demand during the fourth quarter, 4.8 percent, marked an improvement, and the bank credited government stimulus programs for the uptick.

The bulletin cited an increase in vehicle purchases, though noting that this could be reflected in a subsequent softening in consumers's demand for durable goods.

Job woes and tight credit will likely prompt Spaniards to continue boosting their savings, representing a drag on consumption, the bank said.

While the spike in vehicle sales spurred some additional investment in that sector, the "great uncertainty" about economic recovery and firms's ongoing difficulty in obtaining financing cloud the outlook for spending on capital goods, according to Banco de España.

The bulletin highlighted a halt to the sharp decline in home sales, but did not forecast a quick return to positive growth in transactions. Real estate and construction largely powered the Spanish economic boom of the late 1990s and early 2000s.

Banco de España said the Spanish economy could gain from a boost in exports to other nations that have already begun to emerge from the global recession.