Spanish economy scrapes officially out of recession

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Spain scraped out of recession in the first quarter with growth of 0.1 percent, ending six quarters of contraction, final data from the national statistics institute showed on Wednesday.

The Spanish economy, which is struggling to rein in a ballooning public deficit, shrank on a yearly basis by 1.3 percent after declining by 1.8 percent in the previous quarter, it added in a statement.

The figures confirm preliminary data for the quarter which it released on May 12.

Spain, Europe's fifth-biggest economy, entered its recession in the second quarter of 2008 as the global financial meltdown compounded a crisis in the Spanish property market, which had been a major driver for growth in the preceding years.

It is the last major world economy to emerge from recession.

Socialist Prime Minister Jose Luis Rodriguez Zapatero forecasts that the economy will shrink by 0.3 percent this year, after contracting by 3.6 percent in 2009, before returning to growth of 1.8 percent in 2011 and 2.9 percent in 2012.

The government aims to slash the public deficit to the eurozone limit of 3.0 of output by 2013 from 11.2 percent last year but many economists argue the targets are based on growth forecasts that are overly optimistic.

© 2010 AFP

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