Despite the recession lasting three months longer than had been originally forecast, Spain’s economy looks likely to imminently exit the three year downturn.
According to the National Institute of Statistics (INE), Gross Domestic Product in Europe’s fourth largest economy shrank by 0.1 per cent from the first to the second quarter of this year. But in the third and fourth quarters it should be flat or grow by up to 0.2 per cent.
Should this come to fruition, it would support the government’s line that the country will be out of recession this year and allow it to reach the end-of-year target of a 1.3 per cent economic contraction.
Speaking on the upbeat findings, Spain’s Economy Secretary, Fernando Jiménez Latorre, comments: “We believe there’s been an important turnaround in the economic cycle and that the bases are there to continue this new trend and this will show growth, finally ending the long and deep recession.”
The drop of 0.1 per cent in GDP was the lowest since the second quarter of 2011, when the Spanish economy began to shrink.
With spending cuts, unemployment at 26 per cent and tax hikes still dampening domestic demand, it is exports and the tourism sector that is largely responsible for what is expected to be a gradual reversal in Spain’s economic fortunes.
Exports have jumped 6 per cent after a 3.8 percent decline in the previous quarter, mainly because the EU, which includes Spain’s primary trading partners, emerged from its longest-ever recession in the second quarter.
Similarly, the number of tourists grew by 3.9 per cent in the first two quarters of 2013, compared to the same period in 2012. Tourism accounts for almost 11 per cent of Spain’s GDP and 12 per cent of jobs.
Whilst, clearly, there is a long way to go until there is a full recovery, news that Spain’s economy could be about to turn a corner has been supported by many business owners on the Costa del Sol.
“There’s a growing sense of optimism amongst those of us who own our own businesses; there’s a growing sense that there is, finally, a light at the end of what has been a very dark tunnel. Most of us kind of feel that if we’ve made it this far through the recession, we’re now going to be OK,” explains Jules Lehanneur, who runs a beauty salon in Mijas.
Alhaurín de la Torre resident Daniel Harper, who has run his own construction and decoration firm on the coast for the last seven years says: “My customers – both new and existing – have seemed over the last six months or so slightly less reluctant to spend money. Of course, this then has a knock-on effect to me and my suppliers. Things are starting to move a bit more.”
Others, however, are not so convinced. One restaurateur from Fuengirola, who declined to be named, affirms: “Even though things do appear to be picking up slightly, things are still incredibly tight. There are lots of people around but they’re just not spending the money they once did, especially our Spanish customers.
“This summer has been better for us than last summer, but it’s nowhere near where what it used to be. We’re not out of the woods yet.”
Extracted from The Sur in English