Rajoy Abandons Spain Growth Forecast for 2013 as Austerity Bites

Spanish Prime Minister Mariano Rajoy abandoned his forecast for a return to growth next year as the euro area’s fourth-largest economy endures a fourth round of austerity.

Gross domestic product will fall 0.5 percent in 2013 instead of rising 0.2 percent as the government predicted April 27, Budget Minister Cristobal Montoro said after a weekly Cabinet meeting today in Madrid. Unemployment will rise to 24.6 percent in 2012 instead of 24.3 percent, dropping to 24.3 percent in 2013 instead of 24.2 percent, he said.