Tuesday, August 28, 2012

Spaniards Withdraw Money As Recession Deepens

The Spanish have withdrawn money from banks at a record rate in July, as official figures show their country's recession has deepened.

A rush by consumers and businesses to withdraw their money from Spanish banks intensified last month, with private sector deposits falling to 1.509tn euros (£1.199tn).

The data, released by the European Central Bank (ECB), show deposits fell by almost 5% compared with a month earlier, when the total held was 1.583tn euros (£1.257tn).

It comes as the country's economy continued to shrink in the second three months of the year, as it struggles with a deepening recession exacerbated by tough budget cuts.

The economy contracted by 0.4% between April and June, following a fall of 0.3% in the first quarter of 2012.

Spain fell back into recession in the first three months of this year, and the latest figures show the economy has contracted for the third consecutive quarter.

But the Spanish economy minister said that output would improve in the first quarters of 2013. Read More