MADRID ECONOMIC WEEKLY, JULY 27-31

UNCLAS MADRID 000773 SIPDIS STATE FOR EUR/WE, EEB/IFD/OMA COMMERCE FOR 4212/D.CALVERT TREASURY FOR OIA/OEE/T.O'KEEFFE,D.WRIGHT E.O. 12958: N/A TAGS: ECON EINV ELAB SP SUBJECT: MADRID ECONOMIC WEEKLY, JULY 27-31 REF: MADRID 746 Contents: ECON: GDP Falls Again, but by Less ECON/ELAB: Unemployment Rises Slightly in June to 18.1% ECON: Inflation Falls to -1.4% EINV: U.S. Company Spain's Best to Work for GDP Falls Again, but by Less 1.(U) Spain's GDP fell by 0.9% between the first and second quarter, bringing the year-on-year decline to 4%, according to the Bank of Spain. Although the economy continued to contract, the decline was less than the 1.9% drop in the first quarter. (Europa Press, 7/30) Unemployment Rises Slightly in June to 18.1% 2.(U) According to the EU's statistics office, unemployment rose to 18.1% in June, more than double the 8.9% EU average. Eurostat also revised its previously announced May unemployment figure down from 18.7% to 17.9%, meaning that unemployment continued to rise in June but is slightly lower than had been believed. Eurostat's new figures are in line with the Spanish National Statistics Institute (INE) announcement last week that unemployment was 17.9% in the second quarter as a whole. (EFE, 7/31; INE, 7/24) Inflation Falls to -1.4% 3.(U) Year-on-year inflation fell to a record low of -1.4% in July, according to a preliminary National Statistics Institute estimate. Comment: It appears that prices actually rose slightly in July, but by less than they had risen in July 2008, when oil prices peaked. The year-on-year rate is expected to become less negative starting in August and to reach low positive numbers before the end of the year. (INE, 7/30) U.S. Company Spain's Best to Work for 4.(U) Kimberly-Clark was named Spain's best large company to work for out of 147 that participated in Actualidad Economica magazine's annual survey. Spanish multinationals took the next three spots: Telefonica and the banks Banesto and Santander. Other U.S. companies in the top ten were Cisco Systems and GE. (Actualidad Economica, 7/24) CHACON