Spanish Recession Continues As Economy Shrinks

MADRID (AP) — Spain remained in recession in the third quarter as its economy continued to shrink, although at a slower pace than earlier in the year, the government reported Thursday.

Spanish gross domestic product fell 0.3 percent in the July-September period from the previous quarter, its fifth consecutive drop and technically keeping it in recession.

In the first quarter, the economy shrank by 1.1 percent, the National Statistics Institute said in a preliminary report. Definitive figures will be released Nov. 18.

The once-robust economy fell at an annual rate of 4.0 percent in the third quarter, compared to 4.2 percent in the second.

It said the improvement stemmed from a "less negative" contribution from domestic demand and a strong performance from exports.

Spain's economy has been shrinking since the third quarter of 2008 as a boom fueled by real estate construction and consumer spending collapsed.

The unemployment rate has roughly doubled in less than two years and now stands at 17.9 percent, an EU high. It is projected to rise before the economy starts to recover some time next year.