The Spanish economy stalled in the third quarter as unemployment surged, adding to the Socialist government’s difficulties three weeks before a general election.
Gross domestic product stagnated from the previous quarter, when it grew 0.2 percent, the Bank of Spain in Madrid estimated today. From a year earlier, GDP rose 0.7 percent in the third quarter. Internal demand fell while exports and tourism bolstered the economy, the central bank said.
Prime Minister Jose Luis Rodriquez Zapatero’s plan to cut Spain’s borrowing costs from euro-era records has crimped domestic demand while eroding the Socialists’ popularity as they reduced public wages and froze pensions. The opposition People’s Party, which is set to approve its electoral program today amid pledges of deeper austerity, may win its largest-ever majority on Nov. 20, polls show.
