Spain to maintain its growth pace

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Copy of IOL pic oct18 spain flag Reuters File photo: Reuters

Santander - Spain is set to maintain economic growth of at least 0.4 percent in the second quarter, extending its gradual recovery after a double-dip recession, the economy minister said Tuesday.

“Growth in the second quarter will be at least equal to what we had in the first quarter” of 2014, when the economy grew by 0.4

percent of output, Economy Minister Luis de Guindos said.

The first-quarter figure was double the average for the euro zone and Spain's fastest economic growth since 2008. Unemployment remains extremely high at nearly 26 percent, however.

In 2008 a Spanish property crash plunged the eurozone's fourth-biggest economy into five years of economic and financial turmoil.

Spain faced pressure to seek a full financial bailout from the euro zone in 2012. In the end it got by with 41 billion euros ($56

billion) to rescue its banks.

Spain technically exited its second recession in five years in mid-2013.

The government forecasts the recovery will gain speed with gross domestic product expanding by 1.2 percent this year and three percent by 2017.

Addressing an economic forum in the Spanish city of Santander, De Guindos said: “2014 will be the first year of economic recovery in our country.”.

There is a major recovery of confidence in our country,” he added. “I think we are in condition to emerge clearly from the crisis.”

But 5.9 million people are still looking in vain for work with the jobless rate stuck at nearly 26 percent, according to the latest unemployment figures.

“It is essential to continue strengthening the recovery,” De Guindos said.

The chairman of Spain's second-biggest bank BBVA told the forum he reckoned Spain could create 400,000 jobs in the course of this year and next, if the recovery goes as planned.

The International Monetary Fund said last month Spain had “turned the corner”, reaping the benefits of tough spending cuts, tax rises and other reforms by the conservative government.


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