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Spain's recession eases, recovery still fragile

Spain's recession eases, recovery still fragile
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There has been confirmation that Spain’s economy is coming closer to emerging from two years of recession.

Gross domestic product shrank just 0.1 percent between April and June from the previous quarter, helped by summer season tourism and a jobs boost from the harvesting of fruit and vegetables

But any recovery looks fragile at best, with weak consumer demand in Spain, plus a simmering political scandal, as well as faltering growth abroad, which undermined exports, which are a key element of recovery.

Politicians, including Treasury Minister Cristobal Montoro, seized on the near levelling off of the economy:

Montoro said: “We’re now on a different path to recovery, strengthening the growth of our economy and it means that sooner rather than later, there will be job creation.”

He is hopeful because the second quarter’s fall in GDP of just 0.1 percent is the slowest rate of decline in Spain’s recession plagued economy in almost two years.

That latest growth numbers are from the state statistics agency and match last week’s estimate by the Bank of Spain.

Many economists remain sceptical and point out the pace of growth this year is likely to remain too slow to create jobs, which is essential for a self-sustaining recovery.

The second quarter did see the first drop in unemployment in two years but at 26.3 percent of the workforce, it is still more than double the eurozone average.