The Spanish economy has contracted more than expected in the second quarter, with a 1 per cent decline from the previous quarter according to the latest figures from the Spanish National Institute of Statistics.

Compared to the same period last year, the contraction reached a whopping 4.1 per cent. While other European economies such as that of France and Germany, are already returning to growth, Spain is stuck in a downward spiral.

The Spanish economy has collapsed from being the European role model for growth only two years ago. Spain was creating about half the new jobs in euro zone, according to Eurostat. The success has vanished in less than 24 months with Spain reaching over 4 million people out of work and Europe’s highest unemployment rate at 17.9 per cent.

The Spanish economy’s boom was built on a housing bubble which has since collapsed, leaving disastrous consequences to the economy and society as a whole.

The latest figures released in Spain are the worst year-on-year performance in any quarter since comparative figures were first kept in 1977.