Spain’s economy expanded 0.2% in the second quarter compared to the previous three months when it grew an upwardly revised 0.4%, the National Statistics Institute has said.
The Spanish economy slumped into recession during the second half of 2008 as the global financial meltdown compounded the collapse of a property bubble. It stabilised in 2010.
Spain's high unemployment rate - 20.89% in the second quarter of 2011 - has helped to whip up a nationwide ‘Indignados’ or ‘Indignant’ protest movement against the pain caused by the economic slump.
Spain has been tightening state spending to try to stave off concern in financial markets which fret about its ability to repay its debt because of high borrowing levels and slow economic growth.
The latest figures showed Spain's economy grew 0.7% in the second quarter of 2011 when compared to the same period a year earlier, after posting annual growth of 0.9% in the first three months of the year.
The annual figures showed consumers kept a tight grip on their wallets, with household spending shrinking 0.2% from a year earlier, while the economy got a boost from tourism which pushed up spending by non-residents by 9.0%.
Meanwhile, the Spanish government has reached an agreement with the main opposition People's Party to establish limits on the public deficit and debt.
The constitutional amendment, which will not include specific deficit cap figures, will be accompanied by a law that will set a ceiling for Spain's structural deficit.
The move by Madrid follows calls by Germany and France for countries at the centre of the euro zone's debt crisis to set obligatory limits on deficits in order to regain the trust of investors.
