• Spain's news in English

Spain says goodbye to two-year recession

AFP/The Local · 23 Oct 2013, 10:26

Published: 23 Oct 2013 10:26 GMT+02:00

Facebook Twitter Google+ reddit

After nine straight quarters of contraction in the second trough of a double-dip recession, the eurozone's fourth-biggest economy grew by 0.1 percent, the Bank of Spain said in a report.

The rate at which jobs were being destroyed in the recession, which has thrown millions out of work and increased poverty, eased to its slowest rate since the start of the crisis in 2008, it added.

"In the third quarter, the Spanish economy extended the gradual improvement that it has been observing since the start of the year," the bank wrote.

Wednesday's data came in an economic climate "characterized by a certain easing of financial tensions and improving confidence".

The bank's quarterly estimates are usually confirmed by the government's official figures, due later this month.

The rate of destruction of jobs was 0.1 percent, which if confirmed would be "the least unfavourable rate since the start of the crisis" that erupted in 2008 with the collapse of a building boom, the bank said.

The jobless rate was a huge 26.3 percent in the second quarter, according to the latest definitive figure.

Separately the economy ministry said that Spain slashed its trade deficit in August by 42.5 percent to €1.8 million ($2.5 million).

The government has been trumpeting exports as one of the motors to drive the country out of its slump.

Exports rose by 3.8 percent compared to August last year to €17.2 billion while imports decreased by 3.6 percent.

"As the slide in domestic demand peters out, the ongoing surge in exports will drive growth" in Spain, wrote analyst Holger Schmieding of Berenberg bank.

"Over the course of next year, we look for a rebound in investment to add to the export gains."

Schmieding said the positive data from Spain reflected a general recovery in European countries hit by the financial crisis, such as Greece, Ireland and Portugal.

He said this was thanks to the supportive action by the European Central Bank last year.

"The worst is over. One by one, the euro crisis countries are returning to growth after a savage adjustment recession," the analyst wrote on Wednesday.

Other analysts warn that tough challenges to Spain's recovery remain, however. Unions and the political opposition say ordinary Spaniards will continue to struggle with high unemployment and public spending cuts.

Story continues below…

"We expect private deleveraging together with tight financial conditions and the ongoing adjustment in the housing sector to continue to cap any significant economic growth in Spain in the following years," wrote analysts from Citi bank in a report on Wednesday.

The central bank said Spanish domestic demand declined 0.3 percent in the third quarter compared to the second, with sluggish household spending, but external demand rose by 0.4 percent.

Spain's conservative government is forecasting an overall decline of 1.3 percent output in 2013 before a return to growth of 0.7 percent over 2014.

It forecasts an unemployment rate of 26.6 percent his year and 25.9 percent in 2014.

Spain's national statistics institute publishes the official provisional quarterly growth figures on October 30 and the definitive ones on November 28th.

AFP/The Local (news@thelocal.es)

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Russia withdraws request to refuel warships in Ceuta
The aircraft carrier Admiral Kuznetsov was due to dock in Ceuta

Russia has withdrawn a request for its aircraft carrier group to be refuelled at the Spanish port of Ceuta, authorities confirmed.

Bulls replace guard dogs at scrap yard in Valencia
Two bulls will be patrolling the scrap yard in eastern Spain. Archive photo: AFP

Guard dogs were not proving enough of a deterrent to thieves at a car breakers yard in eastern Spain so the owner has brought in a pair of fighting bulls.

Two-headed shark born in Spanish laboratory
Scientists are studying the rare find. Photo: IBIMA / University of Malaga

Scientists at the University of Malaga found the embryo of a shark with two heads and just one body.

Spain under pressure to stop refuel of Russian warships
Russian aircraft carrier Admiral Kuznetsov is due to arrive in Ceuta. Photo: Mil Ru / Wikimedia

Spain is facing international pressure to refuse permission for a Russian warship flotilla to refuel in Ceuta en route to continuing airstrikes against the Syrian city of Aleppo.

Most wanted: Fugitive rapist arrested in Tenerife
Mohammed Jahangir Alam was arrested n Tenerife. Photo: Crimestoppers.

Mohammed Jahangir Alam, one of Britain's most wanted fugitives, who fled the country in 2008 after allegedly raping a woman, was found working in Tenerife.

Spain's Rajoy says king has tasked him with forming govt
Photo: AFP

Spain's king on Tuesday tasked Mariano Rajoy with forming a government, taking the acting conservative prime minister a step closer to power again after a 10-month political deadlock.

Two imams arrested in Ibiza resort over 'Isis support'
The men were arrested in the resort of Sant Antoni de Portmany. Photo: Jose A / Flickr

Two Moroccan imams at a mosque on the Spanish resort island of Ibiza were arrested Tuesday on suspicion of backing the Islamic State group and inciting jihad.

Balearic Islands choose to keep summertime forever
The islands will have longer evenings during winter. Photo: AFP

The Balearic Islands want to keep summertime when the rest of Spain turns the clocks back on Sunday.

  Brazilian had 'uncontrollable desire to kill': Spain police
Francois Patrick Nogueira Gouveia has been charged with murdering his uncle, his wife and their two children. Photo: Guardia Civil.

A Brazilian teenager accused of dismembering his uncle and aunt and killing their two young sons in a grisly crime that shocked Spain had an "uncontrollable desire to kill", police said on Monday.

Man rescued from bin after climbing in to 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.

Analysis & Opinion
Out of the dark: Five years on from Eta ceasefire
Sponsored Article
Last chance to vote absentee in the US elections
Spanish 'La Mafia' restaurants banned after Italian complaint
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
jobs available