Spain must 'quickly' apply adjustment measures: central bank

16th June 2010, Comments 0 comments

Spain must "quickly" apply economic adjustment measures aimed at reviving its economy, Bank of Spain governor Miguel Fernandez Ordonez said Wednesday.

"There are still important adjustment measures that must be applied, quickly, to avoid holding up the economic recovery," Ordonez said.

"I am referring in particular to the need to finish absorbing the excess capacity of the residential construction sector, to consolidate the assets of the private sector and improve the competitiveness of the Spanish economy."

Spain plunged into its worst recession in decades at the end of 2008 following the collapse of a decade-long property boom which had been the country's engine of growth.

The downturn has caused the unemployment rate to soar to 20 percent, the highest rate in the 27-nation European Union after Latvia's, and it has raised market worries over the country's ability to trim its hefty public deficit.

The Spanish economy, Europe's fifth-largest, only emerged from recession with tepid 0.1 percent growth in the first quarter this year.

© 2010 AFP

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