Exports pull Spain out of recession in third quarterExports pull Spain out of recession in third quarter
Spain’s central bank Wednesday said a two-year recession in the euro zone’s fourth-largest economy ended in the third quarter, when Spain posted 0.1 percent growth from the previous quarter, in line with government projections, marketwatch.com informs. In the first official estimate of economic performance during the quarter, the Bank of Spain said available data shows domestic demand contracted 0.3 percent from the previous quarter, the same as in the previous three months, but this was more than offset by a stronger contribution from the export sector. Bank of Spain’s estimates are typically in line with those made by Spain’s statistics institute, or INE. The institute plans to release its first estimate of Spain’s third-quarter domestic product Oct. 30. The central bank also said Spain’s unemployment indicators in the last quarter had their best performance of any third quarter since the start of Spain’s ongoing property bust in 2008. Prime Minister Mariano Rajoy, said yesterday the recovery from the crisis, which destroyed 3.8 million jobs from the peak of the debt-fueled boom, would be “slow and gradual.”
According to dw.de, the European Commission said it expected the Spanish economy to expand by 0.9 percent next year, but added it would be a tough task to achieve this objective. Spain logged a budget deficit of 10.6 percent in 2012 and suffered from a debt ratio of 86 percent of GDP. In addition, domestic lenders have seen the bad loans on their balance sheets rising to a record level in August, with non-performing credits amounting to 180.6 billion euros (USD 248.74) or 12.12 percent of overall loan volumes.
Stocks have surged, with the Ibex-35 index of leading companies gaining 20 percent this year, and Banco Santander SA Chairman Emilio Botin said last week in New York “everyone” was interested in investing in Spain, Wall Street Journal reports. Microsoft Corp. founder Bill Gates added to the optimism on Oct. 21 by buying a 6 percent stake in Spanish builder Fomento de Construcciones & Contratas SA, while Carrefour SA (CA) Chief Financial Officer Pierre-Jean Sivignon said last week there are signs of stabilization in Spain.