Spanish gross domestic product shrank by 0.3 per cent during the third quarter of the year. This is the 15th month the economy has contracted.
Economic output also fell by 1.6 per cent over the period, which is contributing to the nation's 25 per cent unemployment rate.
The news that Spain has entered year two of recession will have an effect on the property market, causing prices to go yet lower.
This will make real estate in Spain more affordable than ever for British investors looking for foreign property, which will simultaneously help to reinvigorate the nation's economy.
The country will undoubtedly be looking for solutions such as this over the coming months, with the European Economic Affairs Commissioner Olli Rehn announcing that "no further steps in the excessive deficit procedure of Spain are needed at present".