Spanish Economy Shrinks 0.5% in Q1

Spain's struggling economy logged a 0.5 percent contraction in the first quarter of 2013 due to falling internal demand, the central bank said on Tuesday.

"During the first quarter of 2013, the Spanish economy continued its path of contraction, but at a slower pace compared to the end of last year," the Bank of Spain said in its monthly economic bulletin for April.

"According to the information that is available, which is still incomplete, we estimate GDP fell by 0.5 percent on a quarterly basis."

The Spanish economy, the eurozone's fourth-largest, shrank by 0.8 percent during the final quarter of last year.

Earlier this month Economy Minister Luis de Guindos said the government expected gross domestic product (GDP) to show a decline of 0.5 to 0.6 percent in the first quarter of 2013.

The minister forecast that Spain's economy would shrink by between 1.0 percent and 1.5 percent this year, after contracting by 1.37 percent in 2012, in an interview published on Monday in the Wall Street Journal.

That prediction revised the government's official forecast of a 0.5 percent recession in 2013.

Prime Minister Mariano Rajoy's conservative government will unveil a new package of reforms aimed at reviving the Spanish economy, which has struggled since the collapse of a decade-long property boom in 2008.