Spain may have emerged from two-year recession in Q3, with economy growing 0.1%-0.2%; economy should expand 0.5%-1% in 2014, says Prime Minister Rajoy

Cindy Allen

MADRID , September 24, 2013 (Thomson Reuters Corp.) – Spain's economy has expanded between 0.1 percent and 0.2 percent from July to end-September compared to the prior quarter, Prime Minister Mariano Rajoy said in an interview published on the Wall Street Journal web site on Monday.

Quarterly growth in the third quarter marks the end of a two-year recession, the second since a construction boom ended in 2008. The economy should grow between 0.5 percent and 1 percent in 2014, Rajoy said.

Spain's gross domestic product contracted 0.1 percent on a quarterly basis in the second quarter, though many economists warned any return to growth based almost entirely on exports, while domestic demand remained in a slump, wouldn't hold.

A real recovery would not begin until Spaniards begin spending once again, house prices hit bottom and external debt stabilizes, Rajoy said, though declined to project when the 26.3 percent unemployment rate would fall on a sustained basis.

"I won't dare to speculate...The improvements will happen little by little," he said.

(Reporting by Paul Day; Editing by Cynthia Osterman)

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