Madrid, May 1 (IANS/EFE): Spain's economy contracted 0.50 percent in the first quarter of this year, or three-tenths of a percent less than in the final quarter of 2012, the National Statistics Institute, or INE, said Tuesday.

The gross domestic product contracted 2 percent in year-on-year terms in the January-March period, or one-tenth of a percent more than in the prior quarter.

Spain's economy has now contracted for seven consecutive quarters, the INE said.

GDP began falling in the third quarter of 2011 after staging a recovery that quickly stalled.

The drop in GDP in the first quarter of this year was caused by weak consumer spending that was only partially offset by a positive contribution from the export sector, the INE said.

The Bank of Spain estimated last week that first-quarter GDP would show a contraction of 0.50 percent.

Both the INE and the central bank agreed that exports were boosting growth in the economy while consumer spending continued dropping.

The Bank of Spain warned that household spending was unlikely to turn around in the short term due  a low savings rate, a drop in disposable income, high debt levels and labour market uncertainty.