Spain's economy starts to falter

Published on Sunday 3 August 2008 22:02

SPAIN'S once-booming economy is in worse shape than expected and could slip to zero growth, the country's finance minister admitted yesterday.

But the Socialist government does not expect a recession, Pedro Solbes said.

For more than a decade, Spain's robust growth was the envy of much of Europe.

However, new figures suggest that the economy will expand only 1.6 per cent this year and 1 per cent in 2009, compared with 3.8 per cent in 2007, Solbes said.