News Summary: Spanish economy shrank in 3Q

Associated Press
Spain's Prime Minister Mariano Rajoy looks down as he arrives for a debate on the 2013 budget spending cuts at the Spanish Parliament in Madrid, Tuesday Oct. 23, 2012. The government has introduced austerity measures and financial and labor reforms in a bid to convince investors it is getting a grip on its accounts. The measures have led to many strikes and protests and the country faces its second general strike in a year on Nov. 14 while Spain is battling recession.(AP Photo/Daniel Ochoa de Olza)
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Spain's Prime Minister Mariano Rajoy looks down as he arrives for a debate on the 2013 budget spending cuts at the Spanish Parliament in Madrid, Tuesday Oct. 23, 2012. The government has introduced austerity measures and financial and labor reforms in a bid to convince investors it is getting a grip on its accounts. The measures have led to many strikes and protests and the country faces its second general strike in a year on Nov. 14 while Spain is battling recession.(AP Photo/Daniel Ochoa de Olza)

MORE CONTRACTION: Spain's economy shrank 0.4 percent in the third quarter compared with the previous three months, according to central bank estimates Tuesday. It was the fifth quarter in a row that Spain's economic output has contracted.

THE TAKEAWAY: The latest report will increase pressure on Prime Minister Mariano Rajoy to seek financial help from Europe.

THE OUTLOOK: The forecast is for a 1.5 percent contraction this year and 0.5 percent in 2013. Earlier this month, the International Monetary Fund forecast that Spain's economy would contract 1.3 percent next year, more than double the government's prediction.

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