Spanish economy may have declined by 0.2 pct in 2010

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The contraction of the Spanish economy in 2010 may be limited to 0.2 percent, the government said Monday, a slightly better figure than the decline of 0.3 percent it originally forecast for the year.

Spain is fighting to revive its economy, Europe's fifth-largest, and convince nervous investors that it will grow enough to bring its massive public deficit under control without resorting to a Greek or Irish style bailout.

"According to the latest estimates, the (economic decline in 2010) could be of 0.2 percent," Spain's secretary of state for the economy Jose Manuel Campa told journalists when asked what the growth figure for last year was.

The national statistics institute will publish its first estimate for fourth quarter gross domestic product on February 11.

Last week Prime Minister Jose Luis Rodriguez Zapatero said the decline in GDP in 2010 would be "of 0.2 or 0.1 percent, around that".

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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