Spainards protesting against austerity cuts on November 15, 2012.
While Spanish Prime Minister is set to present new measures to help the economic recovery, the National Statistics Institute (INE) has reported that the country’s gross national product (GDP) has contracted by 1.37 percent in 2012.
According to the report released by the INE on Wednesday, the Spanish GNP fell 0.7% from the third quarter and 1.8% from the same period the previous year.
On the same day, Prime Minister Mariano Rajoy said he would soon present a package of stimulus measures, including tax breaks for young entrepreneurs, to help start the country’s financial recovery.
In a separate report presented on January 24, the INE said the country’s unemployment rate has hit a record high of 26.02 percent in the last quarter of 2012, leaving nearly six million people without a job.
Battered by the global financial downturn, the Spanish economy collapsed into recession in the second half of 2008, taking millions of jobs with it.
The fourth-largest economy in the eurozone must lower its deficit to 4.5 percent in 2013 and 2.8 percent in 2014. Many economists, however, say those targets will be difficult to meet amid poor prospects for Spain’s economic recovery.
The Spanish government has also been sharply criticized over its austerity measures that are hitting the middle and working classes the hardest.