Watch CBSN Live

Spain's recession deeper than thought

MADRID Spain's recession is worse than thought after official figures Wednesday showed the country's economy shrank 0.7 percent in the fourth quarter of 2012 from the previous three-month period.

The figure from Spain's National Statistics Office was higher than last week's 0.6 percent estimate from the Bank of Spain and provides further evidence that the economy is hobbled by its high level of debts and sky-high unemployment as well as the government's raft of austerity measures.

Spain's economy, which is the fourth-biggest of the 17 European Union countries that use the euro, has been shrinking for the last 18 months and unemployment stands at a heady 26 percent.

The statistics department said economic activity was down 1.8 percent in the fourth quarter from the year-earlier period. For the whole of 2012, it shrank 1.4 percent. The fourth quarter decline was also more than double the 0.3 percent drop recorded in the previous quarter.

Europe's main statistics office Eurostat unveils its estimate for the eurozone and the wider 27-country EU on Feb. 14.

While struggling with recession, Spain's central government and its regional administrations are under fierce pressure to reduce bloated deficits to convince European authorities and investors the country can manage its finances alone. To do this they have cut spending and sought to clean up a banking system laden down with toxic property assets left over from the crash in 2008.

On Tuesday, Catalonia, whose capital is Barcelona, said it was seeking 9 billion euro ($12.1 billion) this year from the central government's 23 billion euro rescue fund for troubled regions. It said most would be used in servicing debt. Catalonia needed 5 billion euro in 2012 while eight other regions took 8 billion euro from the fund, which totaled 18 billion euro last year.