Spain faces a challenging 2012
The Trader has written extensively about the difficult situation in Spain. Somehow the problems in Spain have almost got “forgotten” due to the focus on Greece and Italy. We predict that the coming 2012 will be when the Spanish problems get more attention. The huge unemployment (+22%), the stagnating economy, and the property sector that needs to fall much more before attracting “bargain hunters”, will all add negatively to the economy in 2012. With more than one million empty properties, remarking the values on these properties will create black holes in bank’s balance sheets. During the holidays, the Economy minister, Luis de Guindos, is painting a rather muted economy ahead.
From Huff Post;
Spain will slide back into recession early next year with the current quarter and the first of 2012 both registering negative growth, new Economy Minister Luis de Guindos said Monday.
“Let nobody be fooled, the next two quarters are not going to be easy either in terms of growth or employment,” de Guindos said.
Spain has already made sharp cuts to its national spending and introduced several reforms under the former Socialist government, but the economy has failed to respond.
Spain began to emerge from a near two-year recession last year. It had two successive quarters of growth in 2011 before posting zero growth in the third period.
All this while misery is hitting new levels. Spain is looking ahead for more pain. From El Pais;
The agency, which provides a wide range of aid to impoverished individuals, served more than 114,000 people in Madrid alone in 2010, say Cáritas sources. Of that number, 64 percent of those who asked for help were unemployed and 82 percent had children. The majority of those seeking aid were Spanish citizens.