Spanish PM says economy shrank less than expected

25th January 2011, Comments 0 comments

The Spanish economy shrank slightly less than the government expected in 2010 as the fourth quarter returned to growth, Prime Minister Jose Luis Rodriguez Zapatero said Monday.

The government's budget for 2010 predicted the economy would shrink by 0.3 percent in 2010 following a fall of 3.7 percent in the previous year but during an interview with Veo7 television he said the figure was "somewhat better".

"It will be a fall of 0.2 or 0.1 percent, around that. The last quarter of 2010 will also be a quarter of growth," Zapatero said but did not give a figure for the fourth quarter.

The Spanish economy, the European Union's fifth largest, slumped into recession during the second half of 2008 as the global financial meltdown compounded the collapse of the once booming property market.

It emerged with tepid growth of just 0.1 percent in the first quarter and 0.2 percent in the second, but then stalled with zero percent growth in the third.

The International Monetary Fund predicts the Spanish economy will post growth of 0.6 percent this year, 1.7 percent in 2012, 1.9 percent in both 2013 and 2014 and then 1.8 percent in 2015.

© 2011 AFP

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