Spain pulls out of recession

07.05.2010 By: Transfer Consultancy based on NY Times

Spain pulled out of recession in the first quarter, when its economy grew 0.1 percent from the previous three months after shrinking for six consecutive quarters, the country’s central bank said Friday. The official end of the recession was welcomed by the Socialist government, which has recently come under intense pressure from investors for failing to implement more forceful changes to help revive growth.

María Teresa Fernández de la Vega, the deputy prime minister, concluded that after the improvement in the first quarter, “the economic recovery is starting.” Spain’s economy contracted 3.6 percent last year. But the government’s relief could be short-lived, with the central bank joining many economists in demanding further steps from the government to help stimulate the economy and meet a goal of cutting the deficit to 3 percent of gross domestic product by 2013.

Commenting on the government’s proposed austerity package, the Bank of Spain said in its monthly report Friday that “the goals of the program are ambitious, but they are based on an optimistic macroeconomic scenario, which means that completing fully the program might require further measures to avoid deviating from the goals that have been set.”