Spanish economic slump easing, says Reuters

Spanish exports are helping to drag the country out of recession

Global news agency Reuters has reported that Spain’s economic slump is showing signs of easing up after a sluggish three month-long period between April and June of this year.

Figures from Spain’s National Statistics Institute suggest that Spain’s economy almost stabilised entirely during the second quarter of the year, after contracting by 0.1 per cent for the first three months of 2013…

Despite a strong recovery in Spain’s export economy, domestic demand is still historically weak, which meant the GDP was dragged into another 0.1 contraction for the second quarter of the year. In August, consumer inflation hit a four-month low of 1.5 per cent, with the rise in exports unable to offset weak domestic performance.

Ever since the country’s property market slumped in 2008 after a decade of near-constant growth, Spain has been in and out of recession – much like the rest of the EU. However, unemployment in Spain remains stubbornly high, at around 27 per cent, and experts predict another 12 months of stagnant job growth.

There are positive signs, however, that a gradual recovery is around the corner. The economies of both France and Germany have been performing better than expected in 2013, and these two countries account for more than a third of Spain’s exports. If consumer demand in Germany and France mirrors national positivity, it could be great news for Spain’s economy, its tourism industry, and its property market.

“Much of what we’re seeing in the first and second quarters has been distorted by Easter falling in March this year and April last year,” Jefferies economist David Owen told Reuters. “We can see that Spain is slowly on the mend, but recovery will be sluggish.”