Industrial output breaks falling trend in January

6th March 2008, Comments 0 comments

Economy Minister dismisses talk of economic catastrophe

6 March 2008

MADRID - Industrial output in Spain rose for the first time in three months in January in what was a piece of welcome news for the government just days ahead of the general elections on 9 March.

The National Statistics Institute said Wednesday that production rose an annual 0.7 percent in the first month of the year after correcting for calendar effects and inflation. Output fell 2.3 percent in December and 1.0 percent as the economy started to slow toward the end of the year.

Production in January was driven by electronic goods, which grew 22.4 percent from a year earlier. Output of office machinery and computers dropped 24.6 percent.

The ruling Socialists have been hit recently by a spate of bad news on the economic front as a decade-long property boom ended and as the effects of a global credit crunch unleashed by the US subprime crisis became increasingly evident.

The main opposition Popular Party has taken a gloom-and-doom approach to the data accusing the government of complacency and incompetence.

Economy Minister Pedro Solbes yesterday sought to downplay the shift in the economy. "The economy is slowing down; I don't think anyone would argue otherwise, but it's not a catastrophe," the minister said in an interview with Spanish television channel Telecinco.

Solbes also pooh-poohed suggestions some Spanish savings banks were at risk because of the slowdown in the property sector. "That is absolutely baseless," he said. He claimed that the Spanish financial system was one of the healthiest in the world.

[Copyright EL PAÍS / Adrian Soto 2008]

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