Spain has announced a slight improvement in economic growth at the end of 2013, hailing the news as a sign of hope after five years of stop-start recession that destroyed millions of jobs.

Despite an unemployment rate topping 26%, Spain's economy grew by 0.3% in the final quarter of the year.

This comes after the Spanish economy edged up 0.1% in the previous quarter, the National Statistics Institute said in a preliminary report.

"It is positive news," Spain's Economy Minister Luis de Guindos said.

"The recovery we started to see in the third quarter of last year is strengthening," De Guindos said. "It is a sign, a sign of hope. It is still very little, it needs more time, it need to strengthen," he added.

The growth rate, albeit modest, was the fastest since the start of the Spanish economic crisis five years ago, he said.

Spain's economy shrank by 1.2% over the whole of 2013, however, the report showed, as the nation struggled with the aftermath of decade-long property bubble that imploded in 2008.

De Guindos, who is predicting Spanish economic growth of about 1% in 2014, said that recent raw data showed signs of jobs growth emerging in the last quarter of 2013.

"These are positive signs and they show that we have left the recession behind although there is still a lot to do," the minister said.

"The path ahead is full of curves, of difficulties, most of all the unemployment rate of 26%," he said.

In the final quarter of 2013, Spain's economy benefited from exports, even though they declined a little, the latest figures showed. The negative impact of weak domestic demand eased a little, too, the report said.

Prime Minister Mariano Rajoy's conservative government says its tough economic reforms and austerity policies pulled Spain back from the precipice of a full-blown bailout.

Though avoiding a widely feared economic rescue in mid-2012, Spain's government obtained a €41.3 billion rescue loan from the euro zone to save its struggling banks, whose assets had been hammered by plunging property values.

Besides slashing spending to rein in Spain's yawning public deficits, the government reformed the labour market in 2012 by cutting dismissal costs and making it easier to change work conditions. 

Analysts say those reforms should make it easier to create jobs as the economy swings back to growth. It is unclear, however, how fast the economy must grow to make a real dent in the jobless queue, which amounted to 5.9 million people unemployed in the last quarter of 2013.