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ECONOMY

Spain’s economy growth jumps in first quarter

Spain's economy growth accelerated in the first quarter of 2015, provisional official data showed on Thursday, in a fresh sign that the nation's recovery is gathering momentum even though unemployment remains high.

Spain's economy growth jumps in first quarter
Photo: AFP

Economic output expanded by 0.9 percent in the January-March period on a quarterly basis, up from 0.7 percent in the previous quarter, according to provisional figures from the National Statistics Institute.

It was the seventh consecutive time that Spain was posting quarterly growth.

On an annual basis the Spanish economy, the eurozone's fourth-largest, grew by 2.6 per cent in the first quarter, up from 2.0 per cent in the previous three month period.

Spain expanded by 1.4 percent in 2014 — its first full-year of growth since a property bubble burst in 2008, throwing millions of people out of work – due to increased consumer spending and business investment.

Like many of its eurozone partners, the country has also benefited from sliding oil prices as well as a weaker euro which has helped boost exports.

"The Spanish recovery is now moving onto a higher plane, elevated by a supportive external environment, namely lower crude oil prices and the recent slide in the euro," said Raj Badiani, an economist at IHS Global Insight.

Prime Minister Mariano Rajoy on Monday said the government expects the country's economy to expand by 2.9 percent this year, up from a previous estimate of 2.4 percent growth.

The ruling conservative Popular Party hopes the recovery can stem its plunging popularity in time for municipal and regional elections on May 24 and a parliamentary election slated for the end of the year.

But the unemployment rate remains high – it stood at 23.8 percent in the first quarter, the highest level in the European Union after Greece's – and is expected to remain high.

The International Labour Organization expects Spain's jobless rate to remain above 20 percent until the end of the decade.

Spain's unemployment rate was at 8.57 percent in 2007 at the height of the property boom, its lowest annual level since the country returned to democracy following the death of dictator Francisco Franco in 1975.

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ECONOMY

Spain’s middle-class youngsters the most likely to end up poor across all EU

Spain leads the ranking of EU countries with the highest risk of young people ending up in poverty as adults, despite coming from families without economic difficulties.

Spain is the fourth EU country with the highest inherited poverty
Spain is EU country with most middle-class young people who end up poor. Photo: Jaime ALEKOS / AFP

Spain is also the fourth EU country with the highest rate of inherited poverty risk, according to Eurostat, the EU Statistical Office.

Data on intergenerational poverty indicates that there is a correlation between the financial situation of the household you grew up in and the risk of being poor when you reach adulthood and in Spain, there is a strong link. 

The latest statistics available from 2019 show that the at-risk-of-poverty rate for the EU was 23 percent among adults aged 25 to 59 who grew up in a poor financial situation at home when they were 14 years old. This is 9.6 percentage points more than those who come from families without financial problems (13.4 percent). 

READ ALSO: Spain’s inflation soars to 29-year high

How the situation in Spain compares with the EU

Spain has become the EU country with the highest risk of poverty among adults who grew up in families with a good financial situation  – 16.6 percent.

This was followed by Latvia with 16 percent and Italy with 15.9 percent.

That statistics also show the countries where it is less likely to be poor after growing up in households without economic difficulties. These include the Czech Republic (5.9 percent), Slovakia (7.9 percent) and Finland (8.5 percent).

The overall poverty rate in the EU decreased by 0.1 percentage points between 2011 (13.5 percent) and 2019 (13.4 percent), but the largest increases were seen in Denmark (1.9 points more), Portugal (1.8 points), the Netherlands (1.7 points) and Spain (1.2 points).  

On the other hand, the biggest decreases in the poverty rate were seen in Croatia (-4 percent), Lithuania (-3.6 percent), Slovakia (-3.5 percent) and Ireland (-3.2 percent).

READ ALSO: Spain’s government feels heat as economic recovery lags

Inherited poverty

The stats revealed that Spain was also the fourth country with the highest rate of inherited poverty risk (30 percent), only behind Bulgaria (40.1 percent), Romania (32.7 percent) and Italy (30.7 percent).

This means that children of poor parents in Spain are also likely to be poor in adulthood. 

The countries with the lowest rate of inherited poverty risk were the Czech Republic (10.2 percent), Denmark (10.3 percent) and Finland (10.5 percent).

The average risk-of-poverty rate for the EU increased by 2.5 percentage points between 2011 (20.5 percent) and 2019 (23 percent), with the largest increases seen in Bulgaria (6 points more), Slovakia and Romania (4.3 points), Italy (4.2 points) and Spain (4.1 points).

The biggest drops were seen in Latvia (-8.5 points), Estonia (-8.0 points) and Croatia (-2.3 points). 

The largest gaps in people at risk of poverty when they reach adulthood were in Bulgaria (27.6 percentage points more among those who belong to families with a poor economic situation as teenagers compared to those who grew up in wealthy households), Romania (17.1), Italy (14.8), Greece (13.5) and Spain (13.4).

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