Reply #26: Zapatero drops hint that GDP forecast may be lowered

[xchrom]

http://www.elpais.com/articulo/english/Zapatero/drops/hint/that/GDP/forecast/may/be/lowered/elpepueng/20110914elpeng_11/Ten

Prime Minister José Luis Rodríguez Zapatero on Wednesday acknowledged the Greek debt crisis could put a drag on Spain's economic growth as the resultant credit crunch drove local banks back into the arms of the European Central bank to meet their funding needs.

Quarterly growth in the Spanish economy slowed to 0.2 percent in the period April-June from 0.4 percent in the first three months of the year as exports, which have offset a sharp fall in domestic demand, weakened.

The government's official forecast for GDP growth this year remains at 1.3 percent, although the International Monetary Fund and other organization's experts believe the figure is likely to be only half that.

"We are going through a period of financial tension and economic uncertainty, particular because of the situation in Greece, which could affect these forecasts," Zapatero said in Congress