The Spanish economy contracted by 0.4 percent in the first quarter of 2012 compared to the previous quarter, according to figures published this Monday by the central bank of Spain.

Spanish GDP shrank 0.5 percent less compared to the same period a year ago.

The Bank of Spain added unemployment continued to rise in the country with nearly 5 million people out of work. However, the rise in unemployment is believed to have slowed down in the last three months of 2011.

The International Monetary Fund (IMF) and the Spanish Foundation of Savings Banks have predicted Spain will be in recession this year, forecasting the economy will contract by 1.8 percent and 1.7 percent respectively.

However, while the IMF is optimistic of a slight upturn in 2013 with a return to growth (0.1 percent), the Spanish Foundation of Savings Banks said on Friday that the recession will continue into 2013 with a further contraction of 1.5 percent.