Spain Close to Recession Exit

Spain’s economy looks on the verge of exiting recession, though data showed the slump will have lasted three months longer than previously thought.

Gross domestic product contracted 0.1 percent in the second quarter from a quarter earlier, the National Statistics Institute (INE) said, in line with forecasts and a preliminary reading.

But in the third and fourth quarters it should stabilize or grow by up to 0.2 percent, Economy Secretary Fernando Jimenez Latorre said following the data, enabling it to meet an official end-of-year target of a 1.3 percent contraction.

“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,” Latorre said.

Spanish exports are recovering but domestic demand has remained weak, contributing to a slowing of consumer inflation, which separate data showed hit a four-month low of 1.5 percent in August.

via Reuters

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