17 June, 2013

By VIVA Team

Spain's economy is set to grow by the end of next year, according to financial analysts

It’s been a long time coming, with more false dawns than a French and Saunders tribute act, but there are strong and encouraging signs that Spain will be able to shake off the recession that has gripped hold of the country for the past five years.

Analysts at media giants Bloomberg have forecast that the Spanish economy will stabilise in 2014, before returning to accelerated growth in 2015. The findings are a result of the 32 median forecasts conducted every month by Bloomberg.

It is expected that Spain will experience economic growth in the first quarter of 2014 for the first time since a mini fillip of improved ecomonic activity in 2011 saw a brief period of unexpected growth. In total, the first few months of next year are expected to see the country’s economy grow by 0.5 per cent. By 2015, that growth could top one per cent, said the survey…

”There is an expectation that the fiscal consolidation will be less of a drag than before,” BNP Paribas economist Luigi Speranza told Bloomberg last week.

The tentative upsurge in positivity has been catalysed by good news emanating from the European Union over the past few days, where MEPs have been persuaded by Spain’s Prime Minister – Mariano Rajoy – to push back the deadline demanding Spain’s budget deficit in line with EU limits by two years.

This reprieve, which means Spain has until 2016 to properly balance its deficit, has given the country some much-needed breathing space, and has saved the International Monetary Fund (IMF) from potential embarrassment after its previous hard-line approach to budget deficits saw Greece wipe 17 per cent off its economic output. Europe’s ministers are giving Spain an easier ride, and the country has responded positively.

Positivity all round, then. Spain and its economy is certainly not out of the woods just yet, but it’s decision makers can be pleased that the various labour, tax and employment reforms they have introduced have helped steer the country towards the right path. Everybody – young, old, employed, unemployed, resident, expat, holidaymaker or property owner – should be buoyed by this latest round of positive news stories.