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Timid Spanish growth to continue in third quarter: BBVA bank

Published on 10/09/2010

Spain's timid recovery from recession should continue in the third quarter with a modest uptick in growth similar to that posted in the two previous quarters, the country's second-largest bank, BBVA, said Friday.

“If the month of September continues in the same the same tendency as July and August, the third quarter could end with a quarterly growth level that is similar to that of the two preceding quarters,” the bank’s economic research department said in a statement.

“Economic activity continued to be practically stable,” it added.

Spain emerged from recession during the first quarter of this year with tepid growth of 0.1 percent which was followed by growth of 0.2 percent in the second quarter.

The second quarter upturn is substantially less than in Germany and France, where growth for the April-to-June period was 2.2 percent and 0.6 percent respectively.

The Spanish economy, Europe’s fifth-largest,entered its worst recession in decades during the second half of 2008 as the global financial meltdown compounded a crisis in the once-booming property market.

The economic downturn has sent the unemployment rate soaring to 20.09 percent in the second quarter, the highest level in the 16-nation euro zone.

Prime Minister Jose Luis Rodriguez Zapatero said Friday it will take time for economic growth to pick up but he said the government hoped the economy would start to create jobs by the end of the year and the start of 2011.

“We are in conditions to consolidate the path of economic recovery. It is going to be difficult for growth to become vigorous and be accompanied by a clear creation of jobs,” he said during an interview with radio Cadena Ser.

The government predicts the economy will contract 0.3 percent in 2010 and then expand 1.3 percent in 2011.