The indications are solid: Spain is likely to return to growth next year

Has Prime Minister Rajoy realls steered Spain through the stormiest parts of the recession?

It’s been a five-year period of bust, gloom, recession and record unemployment, but 2014 is likely to herald the return to growth of Spain’s economy, according to the country’s economy minister, Luis de Guindos.

In fact, de Guindos is confident that Spain will emerge from recession before the end of the year, praising the government’s own successful labour reforms for helping to pump new lifeblood into the country’s economy…

The minister is due to present the 2014 budget later this month, and has confidently predicted that the government will not require additional one-time austerity measures for next year. Instead, the budget will be based on nurturing tentative growth and stimulating the job market, which broke records this year when unemployment reached 27 per cent.

“No doubt 2014 will be the first year when Spain will have some recovery,” stated de Guindos, adding that he expects Spain’s deficit to fall to 6.5 per cent of GDP – which would mean the recovery is bang on target following a revision of the figures.

Earlier this year, Spain negotiated a banking bailout fund from the European Commission worth €100bn. However, the government only needed to request €41bn of that in order to keep afloat some of the country’s biggest banks. de Guindos described this turning point as “a model of what should happen” when bailouts are requested.

Since then, Spain’s ship has undoubtedly steadied, despite the rough seas that the country still finds itself in. The minister, however, did sound some words of caution. Despite projected growth of 0.5 per cent in 2014 following a contraction of 1.3 per cent this year, the country will shake off recession, but not the immediate crisis.

“We believe the economy of Spain is leaving behind the recession, but not – by any means – the crisis.”

With an estimated 78,000 Spaniards moving overseas every six months in order to find work, and more expected to follow, such stunted positivity may not be enough to convince them to stay.