Spain's economy grew between July and September after contracting for nine quarters, data showed today, laying the foundations for an upturn in dire domestic demand.

Gross domestic product (GDP) inched 0.1% higher in the third quarter from the second, Spain's state statistics agency INE said.

This marked the first time the economy has grown since the beginning of 2011 as it officially ended a two-year recession.

The growth rate, from preliminary figures, confirmed a report released last week by the Bank of Spain.

Spain's economy has been shrinking, or near flat, since a decade-long property bubble burst in 2008, leaving millions out of work and thousands of companies out of business.

INE confirmed that third quarter output was supported by exports, the only area of growth since the recession began, and a busy tourist season as holidaymakers shied away from resorts in the politically troubled Middle East and northern Africa.

Domestic consumption has plummeted since the property crash, though the first increase in retail sales after over three years of contraction in September suggested the worst of the downturn could be over. 

Depressed high-street spending could see a slight boost from an easing of inflationary pressures. Consumer prices rose just 0.1% in October, according to preliminary data for European-harmonised inflation today, the lowest annual increase in four years.

National prices fell 0.1%, the first drop since October 2009 and mostly due to a 3 percentage-point increase in value added tax in September 2012.