November 02, 2008 at 1:00 pm by Tom Lydon
Spain’s economy is bordering on a recession as the country experienced its first quarterly decline since 1993, leaving exchange traded funds (ETFs) hanging.
The estimate from the Bank of Spain on Friday showed gross domestic product (GDP) expanded in annual terms in the third quarter, rising by 0.9 percent year-on-year. But the mood is bleak because of the general risk of a deeper downturn in the world economy, reports Jason Webb for The Guardian. Overall, the GDP shrank 0.2% compared with the prior three months.
iShares MSCI Spain Index (EWP) may be affected as the decade long boom in Spain was fueled by consumption and construction, and has ended sharply this year. The economy was too reliant on the property values and high levels of private sector debt and risks recession later this year.
EWP is down 41.8% year-to-date.
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