Second quarter of growth for embattled Spanish economy

THE SPANISH economy expanded at a modest rate again in the last three months of 2013, the second quarter of growth since the country emerged from recession in the middle of last year.

The rate of Spain’s growth also rose marginally, up to 0.3 per cent from the 0.1 per cent recorded between July and September.

Spain’s unemployment remains significantly higher than the EU average, rivalling Greece for the union’s most dramatic rate, at 26 per cent in the fourth quarter.

The country has also recorded extremely low inflation in recent months: during 2013, prices only increased by 0.3 per cent, and actually dropped by 0.1 per cent in the year to November, sparking concerns that the country would dip into a period of deflation.

“We think Spanish growth will continue to pick up slowly in 2014, as domestic demand improves due to a stabilisation in the labour market, financial conditions recover and the continued upturn in the euro area has a positive impact on exports,” said Victor Echevarria of BNP Paribas.