Confident Spain set to revise up growth forecast

Spain is about to raise its forecasts for economic growth and employment as it emerges from a two-year recession, the country's economy minister said on Monday.

Confident Spain set to revise up growth forecast
Economy Minister Luis de Guindos said on Monday Spain would see a "very light" rise in gross domestic product between July and September. Photo: Peter Muhly/AFP

"On September 27 we are going to improve the unemployment forecast for the current year and we will cautiously improve the growth and unemployment forecasts for the year 2014," Economy Minister Luis de Guindos told a gathering of foreign reporters in Madrid.

The government's latest forecasts tip a 1.3-percent contraction in overall economic output in 2013 before a return to growth of 0.5 percent in 2014.

The economy shrank by 1.6 percent in 2012.   

Now strengthening exports and an easing in the decline of household spending "lead us to think that the Spanish economy has come out of recession, but this does not mean it has come out of the crisis", de Guindos said.

He reiterated the government's claim that the economy would in the current quarter emerge from the recession it has been sunk in for the past two years, with a "very light" rise in gross domestic product expected between July and September.

The unemployment rate is currently forecast to stand at 27.1 percent at the end of this year and 26.7 percent in 2014. It dipped to 26.2 percent in the second quarter of this year thanks to summer hirings.

Spain's conservative government has vowed to haul in its budget deficit and has imposed tough budget cuts and tax hikes to that end since taking office in late 2011.

"We are convinced we will reach the 6.5 percent target" set for 2013 without the need for further austerity measures, De Guindos said on Monday.

"A year ago, Spain was a problem for the European economy and the world economy," he added. "Now it is not."

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.