Spain reports fastest economic growth in six years

Wednesday 30 April 2014 18.25
Spanish GDP grew at a quarterly rate of 0.4% in the first three months of the year
Spanish GDP grew at a quarterly rate of 0.4% in the first three months of the year

Spain today announced its fastest economic growth in six years in the first quarter of 2014 even as it failed to dent a 26% jobless rate.

Spanish economic output rose at the quickest pace since a 2008 property crash tipped the nation into a double-dip recession, the National Statistics Institute said in an initial estimate. 

Spain's economy grew at a quarterly rate of 0.4%, it said, the latest sign of a gathering yet modest recovery since the nation emerged from a two-year downturn in mid-2013.

Nevertheless, activity in the euro zone's fourth largest economy is too weak to offer hope for the six million people seeking in vain for a job.

The unemployment rate climbed to 25.93% in the first three months of 2014, up from 25.73% in the previous quarter, official data show.

As many people gave up looking for work or fled the country, the workforce in Spain contracted by 187,000 people, yet the unemployment queue shrank by only 2,300 people to 5.93 million. 

With unemployment high and incomes under stress, sluggish demand within Spain is simultaneously depressing the price of goods and services, raising fears of a deflationary spiral. 

Fresh data showed Spanish consumer prices rose at an annual rate of just 0.3% in April, a turnaround from the previous month's 0.2% decline yet still below the euro zone's inflation target of nearly 2%. 

If prices fall on a broad front for a sustained period, they can lead people to postpone purchases in the hope of getting a cheaper deal later, stalling activity.