Spain's economy squeezed further in the fourth quarter of last year, albeit at a slower rate than previously, rendering it as one of the last European economies to get out of recession.

Investors are observing Spain closely in search of any signs that falling government revenue and rising debt could add it to the list of euro zone economies that are getting into trouble, although its public debt is far below that of Greece.

Its gross domestic product reported a 0.1 per cent fall in the last three months of 2009 - the seventh successive quarter of decline - and in the full year the drop was 3.6 per cent, according to the National Statistics Institute. While, in the third quarter the GDP fell by 0.3% quarter-on-quarter, and 4.0% year-on-year.

In addition, Spain's budget deficit touched 11.4% of GDP in 2009, triggering concerns about the sustainability of its finances. The government seeks to get the deficit down to 3% of GDP by 2013, to stick to EU rules.

"As far as the near-term outlook is concerned, Spanish business surveys keep lagging significantly the recovery which is underway in the country's peers," Tullia Bucco, economist at UniCredit Research in Milan said in a note.