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Latino Daily News

Monday July 2, 2012

Spain’s Economic Minister Says Recession Expected to Worsen

Spain’s Economic Minister Says Recession Expected to Worsen

Photo: Spain Recession to Worsen

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Spain’s economic recession is getting worse, and the economic figures from the second quarter point to a “slightly greater” decline of the gross domestic product than occurred in the first three months of the year, when it slipped by 0.30 percent, Economy Minister Luis de Guindos said Sunday.

The forecast coincides with that of the Bank of Spain, which had already predicted that the contraction between April and June would be “slightly greater” than that between January and March, De Guindos told reporters after giving a speech at the FAES Foundation’s Campus 2012, which is linked to the governing Popular Party.

The government, in any case, is maintaining its prediction that over the year the economy will retreat by about 1.7 percent, and even De Guindos sounded optimistic, saying that in the coming months the deterioration that has been under way for a year will stabilize.

With regard to the possibility that the government will raise the value added tax or withdraw the home-buying deduction, as the International Monetary Fund and the European Commission are calling for, De Guindos said that the recommendations of those institutions “are always taken into consideration.”

The government is committed to the economic reforms, austerity and the fiscal deficit objectives, although that could mean more sacrifices for the public, De Guindos said.

The government has asked for additional efforts to bolster the current economic situation, but the economy minister suggested that more would be needed.

“It’s fundamental that the effort be distributed equitably. That is what the government has done or is trying to do,” De Guindos said, adding that it’s necessary for the public to understand that if sacrifices are being asked for it is because they will be “the platform for growth and for generating employment” in the future.

Things have been done “in the correct way” in Spain, De Guindos said.

The government is going to make every effort to get the public accounts back on a healthy footing and ensure that the economy moves back toward growth because “fiscal consolidation is one of the bases of economic policy,” De Guindos said.