Spain, which has enjoyed 14 years of consecutive growth, has gone into sudden reverse.
Analysts expect figures to show that the country is already in recession, with GDP falling since the middle of last year.
The gloomy statistics are building up. Last week, they showed that industrial output had tumbled by 15.1%, the biggest fall on record, and the country's unemployment rate hit a 12-year high in 2008 of three million.
BBC News website readers in Spain have been sending their stories about how the slowdown is affecting them.
ELISA ARIAS, JOURNALIST AND PR, MADRID
I came back to Spain after two and a half years living in the UK because the credit crunch prompted me to do it earlier than I expected to - and the situation cannot be more devastating.
I was hired by an online newspaper and was promised a one-month contract but when I arrived there was no contract, so I worked there on a temporary basis for three weeks.
The newspaper closed down this week and 40 people, some with young children, will lose their jobs.
Because I had no contract, I have no unemployment benefit or social security. I lived in Madrid, but was forced to go to Malaga to my parents' house.
Many magazines, websites and local televisions have closed down, so it is almost impossible to get a job.
I feel ridiculous leaving CVs everywhere, because I know it's not worth it, it just doesn't make any sense.
It is almost impossible for highly-educated job-seekers like me to find a job. The problem in Spain is that almost everyone has a university degree, so you have to do something else, like a masters or doctorate degree. But in this situation, it doesn't even help.
The figures given yesterday by the government were depressing: three million unemployed - one million more than last year. And the figures may rise one more million in 2009.
Many young people are like me, they don't have any proper contracts or social security. That's why we all live with our parents until we are 30 years old.
You usually have to stay and put up with almost illegal contracts until they finally hire you, and this happens very frequently with journalists.
I think for employers it is too expensive to hire new people, because they have to pay many benefits. This should be regulated in a different way so that more jobs are created.
RICARDO, COMPANY DIRECTOR, BARCELONA
The economy here is at its worst, hundreds of jobs and companies disappearing every day and prices rising.
From the point of view of operating a business in Spain, it is unsustainable in the long run. Spanish legislation is so rigid and in favour of employees, that it is hard for businesses to restructure and adapt to the crisis.
If you need to restructure and cut jobs or change the salaries, even if it is temporary, you are not allowed to do so. So you can't save your business and end up in bankruptcy.
This affects employment because as an employer, when I want to hire people I would rather employ them as freelancers because it is too expensive to give them a contract.
Credit is very difficult to get and it is not easy to get credit cards or get in debt. So people are not heavily indebted, but they are definitely poorer because the salaries are low and haven't gone up in line with prices.
People are not buying and demand has certainly gone down. Demand for our products has fallen by 50%.
If the current situation persists and the government does not change its legislation I do not see many companies staying in Spain or investing in the future. The outlook is definitely gloomy.
LOUISE BRACE, ADVERTISING, MALAGA
I live in Malaga province and have been running a small advertising agency for five years. Our agency tries to help Spanish business communicate with the ex-pat market and we also help the British connect with the local businesses.
We have been exceptionally hard hit here, because of the crash in the construction and real estate market and of course the bad publicity that we have received, because of the ongoing problem of fraud within local councils.
This region relies a lot on real estate and tourism and this is what has kept the southern region of Andalucia going.
Now it's all drying up and business is next to nothing. We try to find jobs to supplement our business and pay our mortgages, but there are no jobs.
Our bank has now frozen our overdraft and asked for the money back immediately. They just told us that we should try to find the money from another bank to pay it off, or ask my family.
The treatment of small to medium-sized businesses by the banks here has had a huge effect on the crisis. With nearly 90% of the business population in this category, they are literally wiping us out with their lack of support in times of crisis. They are taking away loans and overdrafts, not helping to fund our survival.
As much business from ex-pats has been going badly many people, including ourselves, are trying to sell their properties, but it's difficult.
Everybody is selling their properties on the Costa del Sol well below what they are worth, because of the recession and because of the drop in foreign buyers.
Brand new developments with gymnasiums and pools are selling at half-price. There are many empty buildings and empty complexes without a licence. It used to be said that Spain's emblem was the crane, but I think promoters and builders just built and built and now not enough people are buying their properties.
I think they built to satisfy a market of people who were trying to get away from built-up areas and then ruined it by overbuilding.
NEIL SCOTT, CONTRACTOR, SITGES
We live and work in Spain and have been here for the last ten years, my brother and I have a company that does renovations. Around 60% of our clients are from overseas and the rest are residents.
We haven't been affected particularly as our client base is strong and in the upper market level and people are still doing renovations, but construction has taken a nosedive.
We have seen expensive properties which were started a couple of years ago and now just standing partially completed and the machinery abandoned.
We didn't notice the downturn until September, as we usually rest for two months during the summer. Spain shuts down in that time.
But when we came back to work and went to buy materials, we found out that all our credit accounts had been suspended. We usually buy all the materials, put a deposit down and then pay the rest over the next six weeks, but that has stopped.
I didn't know it, but this credit line is debt factored by an insurance company which guarantees the money, and they just stopped the credit.
We managed to survive doing private arrangements because we have been living here for ten years, always pay on time and have a good track record. But many contractors now can't get any credit and this dries up construction.
What is really noticeable now is that shops are starting to close in the towns, and the once busy bars and restaurants are also closing and are virtually empty in the evenings.
Sitges on a Friday night is now totally dead - this was unheard of before.
You have to remember that here in Spain the personal debt problems that people experience in the UK just don't exist to the same level. Here, if you haven't got money in the bank they won't let you spend it and credit cards are paid at the end of the month in full. It is very difficult to rack up a large personal debt.
Source: BBC News
Has the economic downturn affected you or the sector where you work? How do you see the economic situation evolving? What do you believe should be done?
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