Spain GDP contracts in line with expectations in Q4

Forexpros - Spain’s economy contracted during the final three month of 2011, underscoring fears over the impact of the euro zone's financial crisis on the outlook for growth on the region’s fourth largest economy.  

In a preliminary report, Spain’s statistical office said the country’s gross domestic product contracted by a seasonally adjusted 0.3% in the fourth quarter of 2011, broadly in line with expectations.

It was the first contraction since the final three months of 2009. Spanish gross domestic product was flat in the preceding quarter.

Annualized GDP rose at a rate of 0.3%, above expectations for a gain of 0.2%, after rising at a rate of 0.8% in the third quarter. This was the slowest pace since the second quarter of 2010, data showed.

Following the release of the data, the euro held on to losses against the U.S. dollar, with EUR/USD shedding 0.46% to trade at 1.3159.

Meanwhile, European stock markets were broadly lower. Spain’s IBEX 35 dropped 0.95%, the EURO STOXX 50 declined 0.75%, France’s CAC 40 fell 0.75%, Germany's DAX slumped 0.8%, while London’s FTSE 100 dipped 0.65%.