MADRID, May 20 (Reuters) - Spain's economy contracted even more than expected in the first quarter as domestic demand crumbled during an unemployment crisis, official data showed on Wednesday.
Final data showed gross domestic product (GDP) contracted 1.9 percent quarter-on-quarter. This was even worse than a preliminary estimate of a 1.8 percent fall and the steepest slide in half a century, the National Statistics Institute reported.
Hefty public spending made the only positive contribution to GDP. All other sectors shrank as the housing sector collapsed and the number of jobless topped 4 million, or 17 percent, by far the highest rate in the European Union.
"I don't think we've touched the floor in year-on-year terms, although the fall might slow in quarterly terms," said strategist Jose Luis Martinez at Citi.
The results would have been far worse without a 22 percent fall in imports which cut the traditional drain on Spanish growth from the country's trade deficit.
The data preceded final GDP results for Germany on May 26 after Europe sank into what may have been the recession's low point in the first quarter.
Economists said Spain, the euro zone's fourth-largest economy, was in for a slow recovery due to its long dependence on construction and creation of millions of low-skilled jobs.
The European Commission expects Spain to be the last member of the European Union to exit recession, probably in 2011.
"You will have a much clearer rebound in Germany whereas Spain is in for a long period of healing and reconstructing its competitiveness," said Giovanni Zanni at Credit Suisse.
(Reporting by Andrew Hay; editing by David Stamp)