Spain's economy contracts again as recession deepens

The economy shrunk by 0.4% between April and June after a 0.3% drop in the previous three months, the Instituto Nacional de Estadistica said.

On an annual basis, the economy contracted by 1.3% in the quarter.

Speculation has persisted that the country will have to request a full financial rescue.

In June, Spain requested 100bn euros ($122bn; £79bn) of loans from the eurozone's bailout fund to help support its banks, which are struggling with bad debts from loans made in the property sector.

The rate of interest Spain is paying on its debts remains high due to investor concerns, making it difficult for the nation to borrow to pay off its debts.

Last month, Madrid announced additional spending cuts and tax rises worth 65bn euros.

Source & Image : BBC