Spain poised for growth, predicts Central Bank

The Spanish economy is set for an upturn predicts the Central Bank. This has been the first positive indication that the worst days are over for the country. The devastating recession from 2007 fuelled by a property crash had wiped out millions of jobs and had put banks, companies and the general consumers into deep debt.

The Central Bank has estimated that the Spanish economy is poised to grow at a conservative 1.2% this year and 1.7% in 2015.

However all is not well on the unemployment front. It remains stubbornly high as a whole. But while it was 26% at the end of 2013, it promises to fall marginally to 25% in 2014 and further to 23.8%, still a long way to go with the slow growth in GDP not helping matters either.

Even though the Central Bank has put out its own estimates, the conservative government of Prime Minister Mariano Rajoy is even less optimistic. Official figures of economic forecasts predict GDP of 1.0% in 2014 and 1.5% in 2015.

A comparison of other countries on the periphery of the Euro Zone shows a similar scenario. Portugal whose economy had to be bailed out by IMF in May2011 is also showing signs of gradual recovery from the aftermath of recession. Initial forecasts by the Central Bank put GDP at 1.2% this year, 1.4% next year and around 1.7% by 2016 with growth riding on increased exports and household spending. However like Spain, the impact on the unemployment rate wousald be very gradual.

Other bailed out countries like Greece and Ireland are also heading towards export-led recoveries. In fact, Greece has shown a current account surplus for the first time since 1948. For more information click here.