Spanish recession in 2008 say two international banks

The Spanish economy will go into recession this year, and suffer zero growth in 2009, forecast 2 new reports by international banks.

Lehman Brothers and Commerzbank argue that a crash in the Spanish property market, and monetary tightening from the inflation-fighting European Central Bank, will force the Spanish economy into retreat. The property market adjustment is forecast to last until 2010.

The American investment bank Lehman Brothers expects the Spanish economy to shrink by 0.1% in the last 2 quarters of the year, whilst Commerzbank says the economy is already in recession.

If the Spanish economy goes into recession, the outlook for the Spanish property market will only get worse.