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'Spain on track but must change business model'

AFP · 8 Sep 2014, 15:53

Published: 08 Sep 2014 15:53 GMT+02:00

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It hailed Spain's timid return to growth over the past year after five years of economic turbulence, but warned that many nationals are still vulnerable with a jobless rate close to 25 percent.

"It is now crucial to build on these accomplishments, with new efforts to enhance growth, boost productivity, further improve competitiveness and get people back to work," the 34-country group's Secretary General Angel Gurria said in a report.

"We also need to ensure that the recovery is inclusive and the benefits are shared: many people are still facing hardship, and none should be left behind as the situation improves."

Spain emerged from recession in mid-2013 and the economy grew by 0.6 percent in the second quarter of this year, starting to create jobs again, according to the latest official figures.

The unemployment rate dipped just under 25 percent but remains the second-highest in the euro zone, after bailed-out Greece. Among the under-25s in Spain, the rate is 53 percent.

The Spanish government has said it is likely to raise its official growth forecast to 1.5 percent for 2014 and two percent for next year.

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The Organisation for Economic Cooperation and Development (OECD) forecast 1.2 percent growth for Spain this year and 1.6 percent in 2015.

It said Spain should work to diversify its "fragmented" business sector, which it said had too few medium-size and large companies. The OECD urged Spain to ease red tape and diversify financing for businesses.

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