As Spanish economy exits two year recession warnings that it could see contraction again in 2014

Spain has seen the first positive GDP print in over two years, as GDP grew in the third quarter by 0.1 per cent, in line with economist predictions.

That's the first rise in Spanish GDP since the first quarter of 2011, and Ben May, European economist at Capital Economics, says that the "pick-up is likely to have been driven by developments in the external sector".

May highlights encouraging business surveys which "suggest that Spain's recent strong export performance will continue in the near term."

But falling wages, weak employment growth at best and the poor state of households’ finances suggest that a recovery in household spending could be some way off. Meanwhile, we think that tight credit conditions are likely to hold back investment too.

While Spain's prospects are much better than a year ago, May warns that "weakness is like to hold back any recovery in the wider economy" and on that basis Capital Economics " are pencilling in a below consensus 0.5% contraction in GDP next year."