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Madrid - Spain's economy confirmed its slow recovery from recession on Friday when official data showed gross domestic product grew 0.2% in the first quarter from the second.
But the recovery, already substantially weaker than in Germany and France, where second-quarter growth was 2.2% and 0.6% respectively, is expected to come to a halt in the third quarter.
Financial analysts expect tough government austerity measures, a rise in sales in July and the end of government subsidies on new-car purchases to push the economy into negative growth.
Socialist Prime Minister Jose Luis Rodriguez Zapatero on Tuesday admitted that "the third quarter will not be as good as the second."
The provisional figures released Friday by the National Statistics Institute (INE) were in line with estimates published last week by the Bank of Spain. The INE is to release definitive data on August 26.
The institute said that, on a year-on-year basis, Spanish GDP retreated by 0.2%, compared with negative growth of 1.3% in the first.
Spain entered its worst recession in decades at the end of 2008 as the global financial meltdown compounded a crisis in the once-booming property market.
It emerged during the first quarter of this year with tepid growth of just 0.1% in the first quarter.
The government predicts the economy will contract 0.3% in 2010 and then expand 1.3% in 2011.
But other organisations are far more pessimistic, sparking doubts over the government's ability to rein in its massive public deficit.
The Bank of Spain expects a contraction of 0.4% this year before a return to growth of 0.8% next year while the International Monetary Fund has revised its 2011 growth forecasts from 0.9% to 0.6%.
And a study released Monday by the BBVA bank predicted Spain's economy will shrink 0.6% this year ahead of growth of just 0.7% in 2011.
"The factors behind this temporary correction setback in the economic uptrend derive mainly from the contractive effects of fiscal consolidation programmes being pushed through in Spain and Europe, and from the increased uncertainty on the international financial markets," BBVA said.
The government this year introduced tough austerity measures to slash the public deficit from a massive 11.2% of gross domestic product in 2009 to 6% in 2011 and 3% - the EU limit - by 2013.
The cutbacks include a freeze on pensions and a 5% pay cut for civil servants.
The government has also adopted an overhaul of the labour market that will make it easier and cheaper for employers to dismiss workers in an effort to fight an unemployment rate that has hit 20%, the highest in the eurozone.
