Spanish economy grows at fastest pace since 2007

28th August 2014, Comments 0 comments

Spain's economy posted its strongest quarterly expansion since 2007 between April and June due to stronger domestic demand, official data showed Thursday, in a further sign of recovery from recession.

The Spanish economy, the eurozone's fourth-largest, grew by 0.6 percent in the second quarter compared with the previous three months, the National Statistics Institute said, confirming its preliminary estimate.

Year on year the economy grew by 1.2 percent, following four consecutive quarters of expansion.

The quarterly growth figures marked an acceleration from growth of 0.4 percent in the first quarter.

It is Spain's best quarterly growth figure since the final three-month period of 2007, when the economy grew by 0.7 percent.

Prime Minister Mariano Rajoy said earlier this month that the economy was recovering "better than expected" and was now among Europe's best performers.

"We are registering healthy and diversified growth which is here to stay," he said.

"In less than two years we have gone from being an economy on the brink of a bailout to being one of the economies that is growing the most in Europe."

The government has said it will likely raise its growth forecast for this year to 1.5 percent, up from a previous estimate of 1.2 percent, and possibly to 2.0 percent next year, up from 1.9 percent.

Growth in the second quarter was fuelled by a rise in household spending, which expanded by 0.7 percent from the previous quarter, when it expanded 0.5 percent, the statistics office said.

External demand, which had helped prop up the economy, though fell by 0.7 percent, due to a fall in exports as growth cools in many of Spain's main European trading partners.

Spain emerged from recession in the second half of 2013 -- its second since 2008 after a labour-intensive property bubble burst, crippling the economy and throwing millions of people out of work.

The country faced pressure to seek a full financial bailout from the eurozone in 2012. In the end it received 41 billion euros ($55 billion) to rescue its banks.

The latest unemployment data showed the jobless rate edged below 25.0 percent in April-June for the first time since the third quarter of 2012.

But at 24.47 percent, it remains the second-highest in the eurozone after Greece and one of the highest in the industrialised world.

© 2014 AFP

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