Spain has officially emerged from a two-year recession, with its economy growing 0.1pc over the last three months, the country’s National Statistics Institute confirmed on Wednesday.
The positive data, ending nine straight quarterly declines, will come as a welcome boost to Prime Minister Mariano Rajoy and his conservative government after pushing through deeply unpopular austerity measures since coming to power in late 2011.
Spain has succeeded in regaining lost confidence in its economy
Rajoy told lawmakers in Madrid following the release of the data.
Spain’s exit from recession has coincided with renewed investor confidence – last week Bill Gates announced he would purchase a 6pc stake in Spanish construction company FCC.
Spain’s borrowing costs have also recently fallen sharply.
Spaniards hope that the new data marks a definitive end to the country’s worst recession since its transition to democracy following the spectacular bursting of a decade long construction boom in 2008.
Healthy exports, a strong summer in terms of tourism figures and increasing foreign investment have contributed to economic growth from July through September.
But the institute warned that on a year-on-year basis, the economy shrank by 1.2pc as dismal domestic spending offset significant gains in exports.
The government has admitted that while the recession may have technically ended, it will be years before Spain fully recovers from the economic crisis.
Unemployment stands at almost 26pc, after a slight decline recorded over the summer months largely due to seasonal contracts, and is not expected to significantly fall until well into next year.
Some economists are wary of the fact that Spain’s economy has twice inched into recovery before slipping back into recession – in 2010 and 2011 – and insist that further measures are needed to ensure sustained growth,
“It would be premature to say that Spain is out of the woods following one quarter of marginally positive growth but there are encouraging signs in Spain’s export performance,” said John Bowler, Europe Analyst at The Economist Intelligence Unit.
“What is now needed is for a sustained recovery to take hold is more investment and job creation,” he said.
But Spain’s return to growth was considered good news for the euro one as whole. “Spain’s return to growth will ease fears that it may need financial support to remain within the single currency. This should boost sentiment towards the euro zone more generally,” Mr Bowler
The budget presented for 2014 by the government in September forecast that the Spanish economy will record a timid growth of 0.7pc next year.
Published via Telegraph