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'Tough' cuts are paying off: Economy Minister

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'Tough' cuts are paying off: Economy Minister
Spain's Economy Minister Luis de Guindos says Spain could grow as much as 0.2 percent in the current quarter with exports driving that recovery. Photo: Johannes Eisele/AFP
10:19 CEST+02:00
Spain is reaping the benefits of austerity policies and expects economic recovery to take place sooner than previously reported, the country's Economy Minister Luis de Guindos has told the Financial Times.

"We are much more confident than we were six months ago," Luis de Guindos told the Financial Times in an article published on Wednesday.

Spain will emerge from recession in the current quarter and exports will trim the country's unemployment rate, said the minister in an interview widely publicized in the Spanish press.

He added officials were already revising up growth targets for 2014 from the current forecast of 0.5 per cent, and said Madrid thought employment could drop below 27 percent by the end of 2013.

De Guindos went on to talk up the country's tough and "unpopular" tax measures and expenditure cuts.

"Now we expect to reap the fruits of those policies. And we are starting to see the light at the end of the tunnel."

The minister said Spain could grow as much as 0.2 percent in the current quarter with exports driving that recovery.

"The automobile industry is transferring a lot of production not only from Europe but also from Asia to Spanish factories," de Guindos told the Financial Times.

He said Spanish exports were leading the way on exports in the eurozone with 8 percent growth in real terms.

De Guindos also argued that a year-on-year "growth rate of about 1 percent" could be enough "to start creating jobs" and said Spain could reach that point "in the second or third quarter of next year".

The Economy Minister described International Monetary Fund projections of 25 percent unemployment until 2018 as "a little bit pessimistic".     

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