• Spain's news in English

Spain sailing into calmer waters: Central bank

AFP · 26 Sep 2013, 12:28

Published: 26 Sep 2013 12:28 GMT+02:00

Facebook Twitter Google+ reddit

The country's rapid economic descent, which sent the jobless rate soaring to 26.26 percent, has been easing up since the start of the year, the Bank of Spain said in a monthly report.

"Available data, still partial and incomplete, would be coherent with a stabilization or even a slight increase in output in the July–September period," it said.

The rate of deterioration in various sectors of the Spanish economy had slowed, the central bank said, pointing to rising confidence among households and retailers, and a return to expansion in manufacturing.

Employment was still falling but at a slower pace, it said.

The report was the latest sign of greater official optimism about Spain's economy, the fourth-largest in the euro zone, which last year averted a widely anticipated full-blown economic bailout.

Prime Minister Mariano Rajoy this week said the government planned to raise its economic growth forecast for next year to 0.7 percent from 0.5 percent when it releases its budget for 2014 on Friday.

Rajoy told the Wall Street Journal that he expected the economy to grow by between 0.1 and 0.2 percent in the third quarter.

"Spain is out of recession but not out of the crisis," the newspaper quoted him as saying. "The task now is to achieve a vigorous recovery that allows us to create jobs."

Spain has been struggling in a double-dip recession brought on by the bursting of a housing bubble in 2008, which threw millions out of work, left banks holding huge bad loans and sent the public debt soaring.

Rajoy's right-leaning government is expected to stick to its austerity policies in the 2014 budget, freezing government workers' salaries and abandoning inflation-indexing for retirement pensions.

The government set itself the task of finding €150 billion ($200 billion) in savings between 2012 and 2014 as it battled to curb the public deficit and rein in the sovereign debt so as to calm global markets.

It plans to reduce the public deficit from 7.0 percent of economic output last year to 6.5 percent this year and 5.8 percent in 2014, eventually dipping below the European Union-agreed ceiling of 3.0 percent by 2016.

Moody's Analytics said Spanish banks, which have tapped €41.3 billion euros ($56 billion) from a eurozone rescue loan to clean up their balance sheets, would remain under pressure from their exposure to the plunging real estate sector.

Story continues below…

"They will keep credit conditions tight rather than lowering cash dividends or issuing new shares to improve their capital ratios," Moody's predicted.

Spain's sovereign borrowing costs have dropped as concerns over its finances eased, it said.

"However, there is a risk that investors will start to worry about Spain," Moody's Analytics said.

"The weak recovery will keep a lid on tax revenue, making it difficult for the government to reduce its debt burden."

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Man rescued from bin after climbing in find old clothes
Photo: Policía Local Murcia

Police were called after passersby reported hearing a man calling for help from within a rubbish bin in the Vistabella neighbourhood of Murcia, southern Spain.

Spain faces crucial week as conservatives re-take power
Mariano Rajoy hopes to form a government this week. Photo: AFP

Spain entered a crucial week as acting conservative PM Mariano Rajoy prepared to re-take power, ending ten rollercoaster months without government marked by hope and disillusion.

Eight very creepy Halloween costumes ideas from Spain
Photo: Pan's Labyrinth

Forget flamenco dancers and bullfighters, The Local counts down the freakiest alternative costume ideas to dress up in this Halloween.

Man attacked by racist thug in UK street for talking Spanish

Tomas Gil, 27, from Valencia in eastern Spain was talking to his girlfriend in their native language after a night out in the British seaside town of Poole when he was set upon by a racist thug.

Malaga: Police probe bizarre 'sex death' of homeless Brit
The man was found near Malaga airport. Photo: Dennis Howlett / Flickr

A British homeless man was found dead tied to a bench near Malaga airport with his trousers down and his genitals in a can of tuna.

Clock ticking as Spain races to avoid third elections
Third elections could now be avoided. Photo: AFP

Spain's Socialists voted on Sunday to allow the conservatives to take power, likely averting a third election for Spaniards tired of going to the polls.

Spain worries about tourism future
Photo: Josep Lago / AFP file picture

After basking in its best tourist summer season in 15 years, Spain now sees dark clouds on the horizon as popular destinations reach saturation point and holidaymakers are more thrifty, industry experts say.

Spain's Socialists lift veto on Rajoy to break deadlock
The Socialists have decided to lift their veto on the minority conservative government or not. Photo: Gerard Julien/ AFP

Spain's embattled Socialists on Sunday voted to lift a long-standing veto that has prevented the conservatives from forming a minority government, in what should finally end a ten-month political impasse.

Spain's 'Napflix' aims to bore viewers to sleep
Photo: Screengrab/ Napflix

A Spanish video platform called Napflix, designed to put people to sleep with dull content, was launched this week and its founders are on the lookout for more "monotony and repetition."

Recipe: How to make fabada - traditional Asturian bean stew
Photo: Flavio Lorenzo Sánchez/Flickr

The hearty Asturian dish is a perfect lunch on a cold day... and don't forget the crusty bread and cider!

Spanish 'La Mafia' restaurants banned after Italian complaint
Sponsored Article
Last chance to vote absentee in the US elections
Spain's top court overturns bullfighting ban in Catalonia
Hunt launched for ten most wanted Brit fugitives hiding out in Spain
Napflix: Spaniards launch very boring TV channel for siestas
Madrid parish church faces fine over 'too noisy' bells
Celebrate expat life at Madrid’s THRIVE convention
Fury after kids told to bring their own loo roll to school
Disney announces plans for Don Quixote action movie
Activist tells 8-yr-old matador wannabe with cancer 'just die'
King to make last minute push to avoid third vote in Spain
Amazing photos of Catalonia's 'human tower' contest
What's on in Spain: October 2016
'No way, Jose! You'll never get your hands on our Rock'
Recipe: How to make a classic Spanish tortilla de patatas
Chorizo in paella? Go back to cooking school Jamie Oliver
Spain in eye of a perfect storm after 10 months without govt
Thousands share clips of life for 'Spain in a Day' film
Ten incredible Spain locations for Game of Thrones season 7
Analysis & Opinion
Why moving to Spain could be the best decision of your life
Seven reasons why autumn is the very best season in Spain
Spanish study finds four types of personality. Which are you?
New search underway for civil war grave of poet Lorca
Bison found decapitated on Valencia nature reserve
jobs available