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Spain’s two-year recession ending

By AFP | Sep. 28, 2013 at 12:00am
MADRID—Spain’s job-crushing, two-year recession appears to be drawing to a close, the country’s central bank said Thursday, predicting an end to the downturn in the third quarter of 2013.

The country’s rapid economic descent, which sent the jobless rate soaring to 26.26 percent, has been easing up since the start of the year, the Bank of Spain said in a monthly report.

“Available data, still partial and incomplete, would be coherent with a stabilization or even a slight increase in output in the July-September period,” it said.

The rate of deterioration in various sectors of the Spanish economy had slowed, the central bank said, pointing to rising confidence among households and retailers, and a return to expansion in manufacturing.

Employment was still falling but at a slower pace, it said.

The report was the latest sign of greater official optimism about Spain’s economy, the fourth-largest in the eurozone, which last year averted a widely anticipated full-blown economic bailout.

Prime Minister Mariano Rajoy this week said the government planned to raise its economic growth forecast for next year to 0.7 percent from 0.5 percent when it releases its budget for 2014 on Friday.

Rajoy told the Wall Street Journal that he expected the economy to grow by between 0.1 and 0.2 percent in the third quarter of 2013.

“Spain is out of recession but not out of the crisis,” the newspaper quoted him as saying. “The task now is to achieve a vigorous recovery that allows us to create jobs.”

Analysts at New York-based global credit rating and research group Moody’s agreed that Spain is emerging from the recession.

“The Spanish economy will begin to grow before the end of this year, led by exports,” said a report by the group’s research arm, Moody’s Analytics.
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