Spanish Growth Contracts 0.4% In Second Quarter

Spanish gross domestic product contracted 0.4% in the second quarter, versus the prior quarter, according to preliminary estimates released by the national statistics office Monday. On an annual basis, GDP contracted 1%.

Both figures matched figures released from the Bank of Spain released a week ago. The International Monetary Fund said Friday that the economic outlook for the country “remains very difficult and vulnerable to significant downside risks.”

Fears that the country may need a full bailout pressured Spanish bonds in recent weeks, sending yields soaring. Yields retreated late last week, however, on speculation the European Central Bank could take action aimed at bringing down borrowing costs .

The yield on the 10-year Spanish bond eased 8 basis points Monday to 6.62%.

MarketWatch