Spain's PM sees economic recovery in late 2009

19th December 2008, Comments 0 comments

Zapatero predicts the economy will begin to recover in the second half of 2009.

MADRID – Spanish Prime Minister Jose Luis Rodriguez Zapatero Thursday predicted the country's slumping economy would begin to recover in the second half of 2009 after suffering a difficult period.

"We are going to go through some bad months, but there is a certain and solid recovery on the horizon," he said in an interview with the television channel Cuatro.

"In the second half (of 2009) we are going to have some data that points to a recovery.... We are going to emerge to strong from this crisis."

He also predicted inflation would drop to under 2.0 percent this year and to 1.0 percent "at the most" in 2009.

Spanish 12-month inflation plummeted to 2.4 percent in November from 3.6 percent in October, hitting its lowest rate since August 2007.

Spain's economy was until very recently one of the most dynamic in the eurozone but it began to cool in 2007 as the international credit crunch hit an already weakened real estate sector, putting an end to a decade-long property boom.

It is now on the brink of recession after gross domestic product contracted 0.2 percent in the third quarter and the slowdown has led to the loss of tens of thousands of jobs in recent months, mostly in construction and the services sector.

Zapatero earlier Thursday predicted that his government's recent 11-billion-euro stimulus package would lead to a sharp rise in job creation during the first half of 2009.

"It will be at that moment, in March or April, when we will have an intense rhythm of public works under way that will without a doubt create jobs at a considerable rate," he told parliament in a debate on the 2009 budget.

Spain's lower house passed the budget, overturning a veto in the Senate where legislators had slammed the proposal as outdated given the country's fast deteriorating economy.

[AFP / Expatica]

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