Struggling Spain enters ‘fragile’ growth phase

The Spanish economy grew by 0.3 percent in the last quarter of 2013 but shrank by 1.2 percent over the whole year, the Bank of Spain said on Thursday.

Struggling Spain enters 'fragile' growth phase
Spain's 0.3 percent growth rate in the third quarter of 2013 was not enough to stimulate job creation. File photo: Alberto Carrasco

The figures confirmed that the economy is switching into weak growth, after 0.1 percent growth was recorded in the third quarter of 2013.

That positive number saw Spain exit nine consecutive months of recession — the second recession since Spain's crisis kicked off.

The final quarter growth was not enough to spur jobs creation though. 

Unemployment data released on Thursday shows the unemployment rate nudged up to 26.03 percent in the final three months of 2013.

This is up from the 25.97 percent rate previously recorded.

Spain is still struggling to overcome the aftermath of a decade-long property bubble that imploded in 2008, throwing millions of people out of work, and racking up huge debts for the government, banks and people.

The central bank said in its monthly report: "In 2013, the Spanish economy followed a path of gradual improvement", after a recession which had crippled activity since the beginning of 2011, the second downturn in five years.

The bank said that it saw tentative signs that internal demand was picking up and a slight rise of demand from abroad.

Its estimate that the economy shrank by 1.2 percent last year is slightly better than the forecast from the government which expects contraction of 1.3 percent.

The government is counting on growth of 0.7 percent in 2014 but analysts warn that this would not be enough to create jobs.

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