Belfast Telegraph

Spain PM says economy to grow in final quarter

Spain's prime minister said he expected his country's economy to grow again in the final three months of the year after a flat third-quarter performance raised fears that the eurozone's fourth-largest economy could be heading back into recession.

Giving reporters an end-of-year review of the country's economic and political situation, Jose Luis Rodriguez Zapatero said none of the three quarters this year had shown falling output and that he expected the final quarter to show that growth had returned.

The Spanish economy posted a flat quarterly performance during the July-September period, although it rose 0.2% on a year-on-year basis - the first such rise in seven quarters. In the first two quarters growth was extremely sluggish.

One of the government's chief tasks is to slash a swollen deficit from 11.2% of gross domestic product in 2009 to within the EU limit of 3% by 2013.

Mr Zapatero said his government was on track to meet that objective following a series of labour-market reforms and austerity measures.

The prime minister added that he was determined to present reforms to the country's pension system - including pushing back the retirement age from 65 years to 67.

Spain has been the slowest of Europe's big-hitting economies to emerge from recession. Data from the country's National Statistics Institute (INE) suggest Spaniards may be spending more, as the amount being salted away by households dropped in the third quarter.

Retail sales were down 1% year-on-year in November, an improvement on the previous five months.

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