Spain's central bank says economy weaker in Q2

Spain's Economy Minister Luis De Guindos, centre bottom, speaks during a control session at the Spanish Parliament, in Madrid, Spain, Wednesday, June 27, 2012. Spain's central government budget deficit has soared to 3.41 percent of GDP in the first five months of 2012, just 0.09 percent below the figure agreed upon with the European Union for the entire year. Spain, with 24.4 percent unemployment, must slash its deficit to the EU limit of 3 percent of GDP by 2013. It was 8.5 percent in 2011, although the target had been 6 percent. (AP Photo/Andres Kudacki)

Spain's Economy Minister Luis De Guindos, centre bottom, speaks during a control session at the Spanish Parliament, in Madrid, Spain, Wednesday, June 27, 2012. Spain's central government budget deficit has soared to 3.41 percent of GDP in the first five months of 2012, just 0.09 percent below the figure agreed upon with the European Union for the entire year. Spain, with 24.4 percent unemployment, must slash its deficit to the EU limit of 3 percent of GDP by 2013. It was 8.5 percent in 2011, although the target had been 6 percent. (AP Photo/Andres Kudacki)

MADRID (AP) ? The central bank says Spain's recession-stricken economy has slumped further in the second quarter and will likely post a sharper contraction than the 0.3 percent of the first three months.

The bank's June report said drops in consumer demand, car sales and industrial production "indicate activity has continued to diminish at a greater rhythm."

Official second-quarter GDP figures are due to be published in July.

Spain, with a 24.4 percent unemployment rate, has agreed to seek a rescue package for its troubled banks but is battling to convince investors it will not need a sovereign bailout like Greece, Ireland and Portugal.

The interest rate for Spain's benchmark 10-year bonds ? an indicator of investor wariness ? was at 6.83 percent Wednesday, a rate considered unsustainable over the long term.

Associated Press

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