Spain scrapes out of recession but dark clouds remain
Spain scraped out of recession in the first quarter, the central bank said Friday, becoming the last major world economy to return to growth but analysts warned any upturn could be short lived.
The Spanish economy, which is struggling to rein in a ballooning public deficit, grew by 0.1 percent during the first three months of the year over the previous quarter, its first rise since the second quarter of 2008, the bank said in a preliminary estimate. It contracted on a yearly basis by 1.3 percent.
Stimulus measures enacted by the Spanish government including a cash-for-clunkers scheme "have triggered a recovery in some aspects of spending, particularly household spending," it said.
The government predicts the economy, Europe's fifth largest, will shrink by 0.3 percent overall this year, after contracting by 3.6 percent last year, before returning to growth of 1.8 percent in 2011 and 2.9 percent in 2012.
Spain entered its worst recession in decades during the second half of 2008 as the global financial meltdown compounded a crisis in the Spanish property market, which had been a major driver for growth in previous years.