The Spanish Gross Domestic Product (GDP) shrank by 2 percent between the end of the first quarter of 2012 and the end of March 2013 according to the advanced data provided by the Spanish National Institute of Statistics (INE) on Tuesday.

The INE said Spain's GDP fell by 0.5 percent during the first quarter of the year, due to low domestic demand which is "partially counterbalanced by the positive contribution of external demand."

The fall in domestic demand coincides with the prediction made by the Bank of Spain, which had expected it to shrink by 0.8 percent in the first three months of the year.

Meanwhile, although the contraction of 0.5 percent between January and March of this year was 0.3 percent less than in the last three months of 2012, it is superior to the fall registered in three of the four quarters of 2012, when the first and second quarters saw declines of 0.4 percent and the third three month period saw the economy shrink by 0.3 percent, probably as the result of a good summer for the tourist industry.

The Spanish government said last Friday that the country's economy will contract by a total of 1.3 percent in 2013, while the International Monetary Fund (IMF) predicted a 1.6 percent fall and the European Commission (EC) a 1.4 percent GDP's contraction.

The government insists on the fact that Spain will grow in 2014, when the GDP will experience a 0.5 percent expansion. The EC said it would grow by 0.8 percent while the IMF said it would do it by 0.7 percent.

The Spanish Minister of Economy, Luis de Guindos said that this new data are still negative but better than that of the last quarter of 2012 while stating that all indicators "point out to the economic recovery." Endi

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