Spain's central bank said the country's economy continued to shrink, contracting by 0.4% in the third quarter compared with the previous three months.
The development will put further pressure on Prime Minister Mariano Rajoy to seek help from Europe.
This is the fifth quarter in a row that Spain's economic output has shrunk.
It follows a 0.4% contraction in the second quarter and a 0.3 % in the first quarter.
GDP is forecast to show a 1.5% fall this year and a further 0.5% in 2013.
The central bank figure is an estimate.
Official figures are due to be released by the National Statistics Institute at month end.
The bank said consumer demand fell by 1. 2%, although the decline eased a little in the third quarter due to increased spending ahead of a sales tax increase at the beginning of September.
Spain is in its second recession in three years with near 25% unemployment.
The country is one of the focal points in Europe's financial crisis - if Spain defaults on its debts or needs a full-blown bailout, the finances of the 17-country group that uses the euro could be stretched to breaking point.
