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Business

Spain returns to growth after protracted recession

Spain's economy has been reported to be picking up again. Although third-quarter growth was only marginal, it nevertheless indicated the eurozone nation had finally wriggled out of a long period of recession.

Spain escaped from its two-year-plus recession in the third quarter, the country's central bank reported Wednesday.

The Banco de Espana put quarterly growth at 0.1 percent which technically marked the nation's return to positive economic territory, but the slight increase in gross domestic product (GDP) was certainly too weak to justify any talk about a sustainable turnaround.

While quarter-on-quarter figures signaled nascent growth, a year-on-year comparison looks far less rosy, with economic performance in the July to September period this year still down by 1.2 percent as compared to the same quarter in 2012.

Mixed picture

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The central bank also mentioned that the rate at which jobs were being destroyed had eased to its slowest level since the start of the financial crisis in 2008, with the jobless rate still hovering about the 26-percent mark.

The European Commission said it expected the Spanish economy to expand by 0.9 percent next year, but added it would be a tough task to achieve this objective.

Spain logged a budget deficit of 10.6 percent in 2012 and suffered from a debt ratio of 86 percent of GDP. In addition, domestic lenders have seen the bad loans on their balance sheets rising to a record level in August, with non-performing credits amounting to 180.6 billion euros ($248.74) or 12.12 percent of overall loan volumes.

hg/mz (dpa, Reuters, AFP)

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