Spain's GDP up 0.2% in second quarter

 

Spain confirmed its timid recovery from recession on Thursday with 0.2 percent growth in the second quarter, final official data showed.

The figure, which confirmed provisional data issued by the National Statistics Institute (INE) on August 13, follows growth of 0.1 percent in the first quarter, when Spain emerged from recession.

On a year-on-year basis, Spanish Gross Domestic Product shrank 0.1 percent, a figure slightly better than the INE's provisional estimate of 0.2 percent.

The second quarter upturn is substantially less than in Germany and France, where growth for the April-to-June period was 2.2 percent and 0.6 percent respectively.

Spain's government predicts the economy will contract 0.3 percent in 2010 and then expand 1.3 percent in 2011.

Other organisations are far more pessimistic, raising doubts over the government's ability to rein in its massive public deficit.

The Bank of Spain expects a contraction of 0.4 percent this year before a return to growth of 0.8 percent next year while the International Monetary Fund has revised its 2011 growth forecast down from 0.9 percent to 0.6 percent.

Spain entered its worst recession in decades at the end of 2008 as the global financial meltdown compounded a crisis in the once-booming property market and then returned to growth in the first quarter of this year with a gain of just 0.1 percent.

The INE on Wednesday said the economy contracted 3.7 percent in 2009, slightly more than its initial estimate of 3.6 percent issued in February.