Madrid - Spain went deeper into a recession in the first quarter, with gross domestic product (GDP) shrinking 1.8 per cent compared to the last quarter of 2008, the Bank of Spain said Wednesday.

The economy contracted 2.9 per cent over 12 months in its steepest decline since the 1970s.

A recession caused partly by the collapse of a property boom is being aggravated by the persistence of the international slowdown, the effects of which have not been offset by falling inflation and interest rates, the bank said.

Spain's unemployment rose to 17.3 per cent in the first quarter, by far the highest in the European Union. (dpa)