Spain shows best growth for six years: central bank

Wednesday 23 July 2014 13.09
The Spanish government has forecast growth of 1.2% in 2014
The Spanish government has forecast growth of 1.2% in 2014

The Spanish economy grew at its strongest rate for six years in the second quarter of the year, expanding by 0.5% from the previous three months, the central bank said.

The bank also raised its forecasts for output for this year and next, saying the economy would grow by 1.3% this year and by 2.0% in 2015.

The government has forecast growth of 1.2% in 2014 and 1.8% next year.

Spain is gradually pulling away from a deep financial crisis, although unemployment especially among young people remains exceptionally high after a property boom burst and floored the economy.

Official growth figures for the second quarter are to be published on July 30.

The Bank of Spain said growth between the first and second quarters of the year was the strongest since just before the global financial crisis began six years ago, exposing the property bubble.

"In the second quarter, the recovery of the Spanish economy continued in a gradual way, in a context of normalising financial conditions, along with an improvement for employment and confidence," the bank said.

Consumption and business investment in Spain were the main drivers of the economy in the second quarter, the bank said. Exports also made a positive contribution.

Spain, along with other euro zone countries which got into severe difficulties during the euro zone debt crisis, is counting on reforms to raise their economic efficiency and competitiveness to boost exports.

The economy emerged last year from its second recession in five years, achieving growth of 0.1% in the third quarter.

But the unemployment rate in the first quarter of this year was 25.93%, close to a record high level.

Keywords: spanish economy