Spain plunges deeper into recession as economy shrinks 0.4%

Spain has sunk further into recession, after official data showed its stricken economy shrank by 0.4% in the second quarter of this year.

The contraction represents a deeper fall on the first quarter, when the economy shrank 0.3%, according to Spain's National Statistics Institute. This is the third consecutive contraction, following a similar 0.3% decline in the fourth quarter of 2011. The institute blamed the decline on negative domestic demand, compensated somewhat by an increase in exports. Borrowing costs on Spanish government debt hit a record high of 7.5% last week as market participants grew fearful over whether the economy will be able to repay its debts. Spanish unemployment levels also reached a record ...