MADRID, Aug 29 (Reuters) - Spain's weak retail sector and fragile housing market shrank further year-on-year, data showed on Monday, leaving an upturn in consumer demand in the country's struggling economy a distant prospect.
Retail sales fell 3.9 percent in July in calendar-adjusted terms after a revised 7.2 percent fall in June, as cash-strapped consumers shied away from summer shopping.
It was the thirteenth straight monthly drop. Economists had forecast a decline of 5.5 percent.
"The sharp fall in retail sales during July is in line with other indicators suggesting the economy is under increasing pressure after real GDP growth slowed to 0.2% quarter-on-quarter," said Raj Badiani, analyst at IHS global insight.
"More specifically, it suggests that the economy will struggle to sustain the surprise 0.6% quarter-on-quarter rise in overall consumer spending in the second quarter."
Other data also from the National Statistics Institute showed mortgage lending fell by 47.1 percent in June on a non-seasonally adjusted basis. That was the biggest fall since April 2009 when it fell by 51.9 percent.
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