Does Spanish Economic Growth Hint at a Recovery?
Spain’s economy may be on the verge of a turnaround, at least according to a report released by the Bank of Spain, Reuters reports.
The report says that quarterly economic growth for the country came in at 0.1 percent for the third quarter of 2013. Though this may not seem like a large gain — and it is not — it follows nine consecutive quarters of economic contraction, meaning that it is a marked improvement in the data from the past two years. After accounting for the growth, Spain’s economy is still 1.2 percent smaller than it was at the same time last year, according to the bank’s estimates.
The report also covered topics such as inflation, which saw a drastic drop in September, and national debt, which some economists indicated to Reuters is a sign of the steep hill that Spain will have to climb in the coming years. Some have pointed to a change in how taxes impact the inflation rate as the main driver for the drop in rates from August to September, saying that waiting for data from future months would be a good idea before claiming that the decline in inflation rates represents any sort of trend.
Spain’s budget deficit for next year is targeted at 5.8 percent of gross domestic product; this would bring the country’s total national debt to nearly 100 percent of its GDP. Though the country has abided by restrictions placed by international lenders after accessing money from such groups to fund its banking sector, Spain remains plagued by rising debt levels, and calls for further austerity measures are stifled by the country’s continuing poor economic performance.