At the beginning of the summer all the election dramas and austerity woes made Greece the Eurozone nation dominating all the headlines.
But in recent weeks Spain has been the core focus of the currency bloc’s concerns.
In particular, whether or not Spain will seek further aid and trigger the European Central Bank’s highly discussed bond-buying scheme has been the cause of much debate and restlessness. Thus far Spanish Prime Minister Mariano Rajoy has rebuffed the pressures to act heaped on him by the leaders of other nations within the Eurozone and resisted the call for aid which so many industry insiders deem inevitable.
However, the most recent news releases coming from Spain may mean that Rajoy can’t hold out much longer.
Earlier today we reported that top ratings agency Moody’s Investors Service cut the ratings of five Spanish regions. Now data has revealed that in the three months through September the strained Spanish economy contracted for a fifth consecutive quarter.
In the Bank of Spain’s monthly bulletin the central bank disclosed that Gross Domestic Product (GDP) shrank by 0.4 per cent from the previous three months. Contraction of 0.4 per cent was also recorded in the second quarter. Although this figure was slightly better than the 0.7 per cent predicted by economists it is still a contraction of roughly 1.7 per cent from a year earlier and bad news for the nation.
As an economist with Citigroup stated: ‘Progress isn’t conclusive, there is a huge amount of uncertainty in Spain right now. There are question marks about the banking sector and public finances and economic fundamentals suggest we will see a bailout sooner than later.’
Another economist was quoted as saying: ‘The outlook [for Spain] is bad because falling wages, higher unemployment, and stricter budget consolidation will weigh even more heavily on growth next year.’
As of 11:50 am
The Pound to Euro exchange rate is currently trading at 1.2294
The Pound to US Dollar exchange rate is currently trading at 1.5982
The Pound to Australian Dollar exchange rate is currently trading at 1.5562
The Euro to US Dollar exchange rate is currently trading at 1.3000
The Euro to Pound exchange rate is currently trading at 0.8132
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