There has been confirmation that Spain’s fragile economy has limped out of recession.
The state statistics agency concurred with the Bank of Spain’s estimate of last week that gross domestic product inched higher between July and September, officially ending a two-year long slump.
It would not have happened without a jump in exports, but there are also some other signs of life – for example retail sales increased in September for the first time in three years.
GDP was up 0.1 percent from the second quarter, the first such growth since the beginning of 2011.
Christian Schulz, Senior Economist with Berenberg Bank, is upbeat: “It is mainly an export-driven recovery we’re seeing in Spain. The domestic recovery is stabilising which is good, but that stabilisation is now allowing the growth in exports, which has been there for quite a while, to take the economy out of recession overall, and I think the next step will be for investment to return in Spain.”
Unemployment slipped to 25.9 percent during the third quarter, but low consumption and wage cuts meant a fall in inflation in October, down 0.1 percent from a year ago.
The problem for the Madrid government is that austerity continues to hold back the domestic economy.
Exports are the only growth driver and they do not create jobs at the same level as the construction industry did before the decade-long property bubble burst in 2008.
Spain’s economy has been shrinking or close to flat since then with thousands of business forced into bankruptcy and the unemployment rate not falling below 25 percent of the workforce since spring 2012.