Spain escapes recession in Q3 but concerns still high

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Spain escapes recession in Q3 but concerns still high

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Spain escapes recession in Q3 but concerns still high

by AFP Videos 0:52 mins

Spain escapes recession in Q3 but concerns still high

by AFP Videos 0:52 mins

SHOTLIST : MADRID, SPAIN, 30 OCTOBER 2013, SOURCE: AFPTV SOUNDBITE 1, José Carlos Diez (man), economist and teacher in ICADE Buisness School (Spanish, 15 seconds) "Obviously things are much better than a year ago when everything crashed. The fact we've stabilised in the recession is very important, but we still have a very high deficit and debt and that will be difficult to reduce " SOUNDBITE 2, José Carlos Diez (man), economist and teacher in ICADE Buisness School (Spanish, 29 seconds) " While we are out of recession, we are not out of the crisis and there's still a risk of relapse. Any tension in Greece, Portugal or another country can affect us. We are very dependent on what will happen with the banking union, for Spain it is very important to know what tax decisions will be made, for example if in Europe there will be additional stimulus as was the case with the social funds for youth employment, those kind of measures generate high uncertainty for Spain's recovery." - VAR of José Carlos Diez in Madrid /// --------------------------------------------------------- AFP TEXT STORY Spain escapes recession in third quarter: official data / Madrid (Spain) - 30 October 2013 12:10 - AFP (Elodie CUZIN) - LEAD ADDS inflation data / MAD - ECO - 484 Words / Spain economy growth indicator / GRAPHIC / PAW-GL , AFW-GL , MEW-GL , EUW-GL , MAX-GL , ANA-GL 30 October 2013 Spain escaped from a two-year recession in the third quarter of this year with growth of 0.1 percent, official data showed on Wednesday, though unemployment remained extremely high. Strengthening exports drove the timid recovery in the eurozone's fourth-biggest economy despite weak internal demand, the National Statistics Institute said in a statement. The growth figure meant a technical end to the recession as measured in terms of contraction in output. But economists warn of continuing challenges to recovery and expect unemployment to remain painfully high after five years of crisis that have thrown millions out of work and driven up poverty. The International Monetary Fund has warned Spain's unemployment rate will stay above 25 percent until 2018. The unemployment rate was 25.98 percent, a slight decline from the previous quarter but still one of the highest in the eurozone, according to separate INE data released last week. It was Spain's second recession in five years, sparked by the collapse of a building boom in 2008 which last year made the country a focus of concern for the stability of the whole eurozone. Wednesday's growth figures -- preliminary data from the institute which are due to be confirmed on November 28 -- confirmed last week's estimate from Spain's central bank. "While economic prospects are considerably better than a year ago, particularly in the external sector, domestic weakness is like to hold back any recovery in the wider economy," said a report on Wednesday's data from analysis group Capital Economics. "We expect the unemployment rate to remain around its current high levels for some time yet and public debt to continue to climb." The Spanish government expects an overall contraction of 1.3 percent for 2013 -- slightly better than the 1.6 percent in 2012 -- before a return to timid growth of 0.7 percent in 2014. Consumer price inflation in Spain slowed in October to 0.1 percent compared to a year earlier, according to other preliminary data from the statistics institute, harmonised with EU estimates. The institute attributed the easing in October to a fall in the price of food and a smaller rise in university fees than in the previous year. Inflation has been easing in Spain since peaking in October 2012, in line with a general easing in the eurozone indicated by the European Union data agency Eurostat. By another measure, the non-harmonised inflation figure that serves as a benchmark in Spain, inflation was negative for the first time for four years, at minus 0.1 percent. Spain has pushed through painful spending cuts to bring down its soaring public deficit under pressure from the European Union. It also last year passed labour reforms that have made it cheaper for companies to hire and fire workers. Spain resisted pressure last year to seek a full bailout from its neighbours but accepted 41.3 billion euros ($56.8 billion) in eurozone rescue loans for its banks.

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