Spain's recession is deepening and depositors are pulling their money out of the nation's banks, with 5 percent of total deposits getting withdrawn last month.

Europe's fourth-largest economy shrank 0.4 percent in the second quarter from the first three months of this year, but compared to the second quarter of 2011 the economy fell 1.3 percent, Spain's INE statistics institute said Tuesday. The INE also revised down its 2011 fourth-quarter GDP to minus 0.5 percent from minus 0.3 percent.

Deposits in Spanish banks fell to 1.509 trillion euros at the end of July from 1.583 trillion at the end of June.