- Juan Pablo Lopez, an analyst at Espirito Santo Investment Bank
Spanish banks' bad loans rocketed to a fresh high in October, as more companies and homeowners missed their credit payments amid worsening economic crisis in the country. The proportion rose to 11.2%, up from 10.7% in September, with 7.4 billion euros ($9.8 billion) of loans falling into arrears in a month, reaching the total of 189.6 billion euros in doubtful credit in the banking system. The figure was only rising since 2008, when the country's prolonged property boom ended. Spain's economic slump is continuing for a fifth year already, as nation's gross domestic product fell 0.3% last quarter, after shrinking 0.4% in the second quarter.
"It's clear that these levels of bad loans are going to keep rising," said Juan Pablo Lopez, an analyst at Espirito Santo Investment Bank. "The flows of entries into default are still very high."
"I believe this quarter will be the most difficult since the economic contraction started," said Luis de Guindos.
"As the year draws to a close, there seems to be little prospect of the Spanish economy emerging from recession," said Andrew Harker, an economist at Markit. "Activity, new orders and employment all fell sharply again."
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