Madrid - The Spanish government Friday said it expected the economy to grow 2.3 per cent this year, down from a previous forecast of 3.1 per cent.

The growth was expected to remain on the same level in 2009.

The Bank of Spain had earlier predicted a growth of 2.4 per cent for this year and 2.1 per cent for 2009.

The international economy and a crisis in the formerly overheated construction sector have led to an economic slowdown after more than a decade of rapid growth.

In the first quarter of this year, unemployment rose to 9.6 per cent, the highest rate since 2005. Inflation is now at 4.5 per cent, the highest figure in 13 years.

In 2007, the economy was still growing at a rate of 3.8 per cent. (dpa)