Spanish deposits shrink by €74bn as recession deepens

Depositors in recession hit Spain withdrew EUR74bn from the country’s banks in July, according to figures from the European Central Bank (ECB).

The deposit loss equals 7% of Spain’s GDP in a single month, with the total loss at about 11% in the first seven months of 2012.

The flight of funds from Spain mirrors the situation of Greece, with analysts speculating that the capital is being diverted to German bank accounts and perceived safe havens, such as London property.

Official figures in Spain, released yesterday, show that the country is in a double-dip recession and the region of Catalonia approached Madrid for a EUR5bn rescue package.

Spain’s statistical office said on Tuesday that the country’s economy contracted in the second quarter, with GDP sliding by 1.3% compared to the second quarter of 2011.