Spain's economy 'worse' than predicted: minister

0 Comments | AFP, August, 2008

MADRID (AFP) — Spain's economy is in a worse state than the government had predicted but is still unlikely to slip into a recession, Economy Minister Pedro Solbes said in an interview published Sunday.

"For the past two months there have been radically different data, such as the rise in oil prices or interest rates, that make us think that the economic situation is worse than we had all predicted," Solbes told the newspaper El Pais.

The Spanish economy, the eurozone's fourth largest, expanded 3.8 percent last year but has since been hammered by the international lending crisis, rising interest rates, a housing market collapse and record oil prices.

Solbes last month announced the government had slashed its economic growth forecast for this year from 2.3...